Methanol‑to‑Jet: Policy, Economic and Commercial Outlook
This first-of-a-kind analysis, written by the Methanol Institute with significant contributions from Argus’ Chris Hairel and Juan Pablo Castillo, explores how Methanol-to-Jet (MtJ) can support aviation decarbonisation, looking at relevant policies, costs and scalability, emerging projects, and progress toward fuel certification.
The aviation sector faces a dual challenge: rapidly rising demand for air travel and the urgent need to reduce greenhouse gas (GHG) emissions. Global jet fuel demand is projected to increase by around 50pc by 2050, while aviation has limited alternatives fuels, particularly for long‑haul flights. Sustainable aviation fuel (SAF) is therefore central to aviation decarbonisation, yet existing SAF pathways alone cannot scale fast enough to meet future demand. This report presents one of the first comprehensive assessments of Methanol‑to‑Jet (MtJ) as a scalable and competitive SAF pathway.
MtJ converts methanol into jet‑range hydrocarbons using proven chemical processes, most commonly via the methanol‑to‑olefins (MTO) platform followed by oligomerisation and hydroprocessing. A key advantage of MtJ is feedstock flexibility: methanol can be produced from biomass, biogenic waste, industrial off‑gases, or from renewable hydrogen and captured CO₂ (e‑methanol). When renewable methanol is used, MtJ can deliver lifecycle GHG reductions of roughly 70–90pc, positioning it as a strong contributor to the aviation industry’s climate goals.
From a policy perspective, MtJ is well aligned with emerging SAF frameworks. In Europe, ReFuelEU Aviation and the Renewable Energy Directive (RED III) create strong long‑term demand signals for both bio‑SAF and synthetic fuels, while the EU ETS SAF allowance mechanism helps close the cost gap. In the United States, the Inflation Reduction Act, Bipartisan Infrastructure Law and state‑level clean fuel standards provide incentives, although long‑term policy certainty remains less robust than in the EU. Globally, International Civil Aviation Organization (ICAO) initiatives such as CORSIA and the Long‑Term Aspirational Goal further reinforce the role of SAF.
Techno-economic analysis indicates that biomethanol‑based MtJ is among the lowest‑cost novel SAF pathways, outperforming Fischer‑Tropsch and advanced Alcohol‑to‑Jet routes. Although MtJ has higher capital intensity than hydroprocessed esters and fatty acids (HEFA), this is offset by higher yields, reduced exposure to feedstock scarcity and strong integration opportunities. Integrated MtJ facilities—co‑located with methanol production, hydrogen supply or ports—can significantly reduce costs and may approach parity with fossil jet fuel by around 2040 under supportive policy conditions.
Commercial momentum is building. ASTM qualification for MtJ fuels is progressing, with approval anticipated in the 2026–2027 timeframe, a critical milestone for widespread adoption. As of August 2025, the global MtJ project pipeline represents approximately 1.8 million tonnes per year of SAF capacity, primarily in Europe and Asia, with a strong preference for vertically integrated project designs.
Overall, the report concludes that MtJ offers a credible, scalable and cost‑competitive complement to existing SAF pathways. With regulatory clarity, targeted financial support and continued progress on certification, MtJ could play a meaningful role in meeting aviation’s long‑term decarbonisation objectives.
