A Minimal Methanol Backstop for High Electrification Scenarios

Abstract

Electrification of sectors such as land transport and building heating is a cost-effective pathway to deep decarbonization. However, some sectors still require energy-dense fuels -- including aviation, shipping and backup power -- or chemical feedstocks. While a 'hydrogen economy' is often proposed to fill these hard-to-electrify gaps, it faces challenges in transport, storage, and infrastructure coordination. We introduce a 'minimal methanol backstop' to supply residual demand in highly-electrified systems. As a liquid fuel, methanol is easy to store and transport, and avoids infrastructure lock-in. Produced from hydrogen and carbon monoxide, it can help integrate biogenic carbon from decentralized biomass wastes and residues. Using a European energy system model constrained to be carbon-neutral, we show that methanol-based systems increase total system costs by 2.4% relative to hydrogen-based systems, an increase that remains below 6% across sensitivities. We argue that this modest cost premium is justified by reduced infrastructure complexity.