Electricity grid decarbonisation or green methanol fuel? A life-cycle modelling and analysis of today's transportation-power nexus

Methanol from captured CO2 provides a more sustainable alternative to gasoline due to its low carbon footprint, yet it requires a large amount of renewable energy that could be used instead to decarbonise the electricity mix. A techno-economic and environmental analysis of methanol produced from captured CO2 and renewable energy is conducted to shed light on the transportation-power nexus. The investigated scenarios differ in how the carbon-free energy source - electricity from wind - is used to either decarbonise the electricity mix or produce green methanol to displace conventional fossil fuels. The assessment is carried out for six countries that differ in the composition of their electricity mix and gasoline consumption. The results of this holistic assessment show that, at present, decarbonising the electricity grid using renewable energy sources and carbon capture and storage would offer greater environmental benefits, without incurring large changes in direct economic costs, compared to producing methanol from the hydrogenation of captured CO2. Though this insight might change in the future if the carbon intensity of the mix is reduced and green methanol becomes cheaper, it highlights the need to consider the transportation-power nexus in assessing alternative fuels and thereby prevent shifting of emissions from one sector to another over their life cycle.