[Series 3/7] ‘Methanol is the smartest route to sustainable kerosene’

A coalition of 24 companies is working together on the development of large-scale hydrogen imports. In May 2026, the coalition presented a hydrogen trade agenda to Minister Stientje van Veldhoven, containing recommendations to help kick-start the hydrogen market more quickly, including through greater clarity on infrastructure, permits, and financial guarantees. Nederland Waterstofland (Hydrogen Country Netherlands) is publishing a series on this hydrogen trade agenda and the import of various hydrogen carriers.

• Part 1: Hydrogen import by the Netherlands
• Part 2: Liquid hydrogen
• Part 3: Methanol (this article)
• Part 4: Ammonia (forthcoming)
• Part 5: LOHC (forthcoming)

Niels van Buuren, responsible for Power2X’s methanol activities, explains why methanol is a good hydrogen carrier for the Dutch market and what is needed to actually build the plant. Part 3 in a series on the development of hydrogen imports.

Power2X is only five years old and already wants to build billion-euro plants. Where does this ambition come from?

"We were founded by Occo Roelofsen, a former partner at McKinsey, who saw that the transition to green molecules is much more complex than the transition to green electricity. He wanted to do something about that. We have raised capital, 130 million euros from the Canadian pension fund CPP Investments. That’s what we call ‘patient capital’. A pension fund isn’t in it for a quick sale of its shares, but for the long term. We are now busy designing and then building the plant in Rotterdam. Once the plant is built, we want to operate it ourselves for decades. We mainly focus on large projects, over 500 million euros, often over a billion. Our team now consists of about 90 people, many of whom have experience at Shell, Linde, and Air Liquide."

Why has Power2X chosen methanol as a hydrogen carrier? 

"Methanol has a huge advantage: there is already a global infrastructure in place. There are ships, terminals, trading houses, and a lot of expertise. This is all for grey methanol, but chemically, there is no difference between green and grey methanol. The existing market is estimated at 120 million tons per year worldwide in 2026. Through the port of Rotterdam, 4 million tons of methanol are already imported annually. So, we’re not building the system from scratch. A second advantage is that methanol can be used directly. You don’t necessarily have to crack it back into hydrogen. Methanol can be used as a feedstock for chemicals, as a marine fuel, as a blend in road transport, and as a base for synthetic kerosene. Four markets for one molecule."

Which of these four markets is Power2X focusing on?

"Sustainable aviation fuel, or e-SAF (Synthetic Aviation Fuel). The European ReFuelEU Aviation regulation obliges fuel suppliers to airlines to blend an increasing percentage of SAF: 1.2 percent over the years 2030/2031, rising to 10 percent in 2040 and 70 percent in 2050. The regulation is in place and cannot simply be reversed. For synthetic SAF made from methanol, separate sub-mandates apply. This provides certainty on the demand side that other markets do not yet have. Shipping seemed a few years ago to be a promising market for sustainable fuels, and thus for methanol, but international regulation through the International Maritime Organisation (IMO) has not progressed as we had hoped. That market is not taking off for now. Aviation is more robust because the mandates are set at the European level."

What does the Rotterdam project look like in concrete terms? 

"We are building what I call a central conversion hub. It’s actually a reverse refinery. In a regular refinery, you crack long oil molecules into shorter, more valuable molecules like kerosene, gasoline, and naphtha. We do the opposite. In the first step, we convert methanol into olefins such as propylene and ethylene. This is proven technology. In the second step, these short olefins are coupled into longer hydrocarbon chains and converted into synthetic kerosene. This step is newer. Honeywell is our technology provider. We import renewable methanol from around the world to Rotterdam. The port of Rotterdam is an ideal location because it is already a major European import and distribution hub for energy and raw materials. Advario is our logistics partner and handles storage and blending with conventional kerosene. The product then enters the CEPS pipeline, the Central Europe Pipeline System. This is the so-called NATO pipeline that transports 33 percent of all kerosene in Western Europe and runs past our plant. The location is ideal."

How big will the plant be, and when should it be operational? 

"The EfR plant (Efuels Rotterdam) will process 750,000 to 1 million tons of green methanol per year and produce 250,000 tons of e-SAF from it. This is equivalent to the fuel needed for 7,000 flights from Amsterdam to New York. That’s about 40 percent of the total European e-SAF market in the first years of the blending mandates. The plant will cost billions of euros. We are now at the end of the concept selection phase. We have chosen the technology, finalized the design, and made a first capex estimate. The next step is the FEED phase, where we will focus on detailed engineering. This will also allow us to map out the required investment more accurately. We want to complete this phase in 2028. In the same year, we hope to make the final investment decision. Then we will need three years to build the plant. This means the plant will be operational in time for the first phase of the European blending mandates in the period 2030-2032."

Which countries will supply the green methanol? 

"To purchase renewable methanol as cost-effectively as possible, we look at regions where green electricity is abundantly available and can be generated at low cost. Several regions are in the picture: Europe itself, especially Spain and Scandinavia, but also South America and Asia. China is in the top three of potential suppliers, although this is also a political consideration. Security of supply is playing an increasingly important role. You don’t want to be dependent on one region, as we have learned from fossil fuels. The largest cost component of green methanol is hydrogen, which in turn consists of 60 percent green electricity. Producers of methanol want to purchase this electricity as cheaply as possible. Spain and Scandinavia are currently the only European locations that can truly provide cheap green electricity. Outside Europe, the possibilities are greater."

Who will be the buyers of Power2X’s e-SAF? 

"The fuel suppliers who sell kerosene to airlines. They have legal compliance obligations: if they do not meet the European blending mandates, they risk hefty fines. So, they want the certainty that they can flexibly purchase sustainable kerosene and that they do not pay more than their competitors. In the period 2030-2032, the e-SAF mandates will already require 600,000 tons of e-SAF annually. By 2040, this will increase to over 7 million tons. The market is growing rapidly, but large plants are needed to produce the stuff. These plants, like Power2X’s, can only be built if off-take agreements of 10 years or longer are signed. This is necessary to finance the construction of the plants."

What is holding back the investment decision? 

"There are a number of hurdles. First, there is uncertainty about the regulation. The revision of ReFuelEU Aviation has been postponed, probably until the end of 2027. In particular, buyers are now waiting for this outcome before signing off-take agreements. On the methanol side, projects are also stalled because parties cannot make a final investment decision. The RFNBO requirements (Renewable Fuels of Non-Biological Origin) - the European definitions of what exactly green hydrogen and green methanol are - have not yet been fully crystallized. If the rules of the game are unclear, everything comes to a standstill. Second, the financeability of this emerging market. A supply contract for green methanol for ten years can easily represent a value of 2 billion euros. For many project developers, carrying such large contracts on their balance sheet is a challenge. If a supplier, for example, cannot deliver, the buyer must be able to find an alternative. These structural risks require government involvement, through guarantees or insurance mechanisms. Otherwise, such a nascent sector cannot be financed. This may well be the biggest problem in the entire chain. Third, the pre-FID costs (Final Investment Decision). Before we make a final investment decision for the Rotterdam project, we will have spent tens of millions on engineering and design. This is risk capital. If the project does not go ahead, you lose it. This risk is inherent to the sector we are in, and we are willing to take it, but some public support in this phase, not as a subsidy, but as co-financing of the pre-project phase, would be enormously helpful."

What does Power2X specifically expect from the government? 

"Stable and internationally aligned regulation is the most important. The RFNBO requirements must be clear, also for suppliers outside Europe. There is currently uncertainty about the CO2 origin rules for methanol: the CO2 used in production must come from biogenic sources or from an industrial source that has paid a price for the CO2 through a mechanism equivalent to the European ETS. But what ‘equivalent’ exactly means is not yet defined. These kinds of details determine whether a project in India or South America can meet European standards. In addition, demand creation is crucial. India is doing it smartly: the government organizes auctions where supply and demand are brought together. Suppliers of green ammonia are linked to Japanese buyers, with the government acting as a broker. Something similar could work for e-SAF. If you organize supply and demand at the same time, you connect the chain and no one has to bear the first risk alone. Finally, we must treat this as a European issue. The Netherlands cannot pull the renewable hydrogen agenda alone. The mandates are European, the suppliers are international, the buyers are international. So, don’t make it a Dutch approach, but a European one."

How realistic is 2031 as a start date, given all these uncertainties? 

"It depends on how quickly the regulation becomes clear and how the market develops to the point where customers are willing to sign binding off-take agreements. Such contracts enable final investment decisions. If the ReFuelEU review provides clarity by the end of 2027 and the RFNBO requirements are established, we hope to make our investment decision in 2028 so that we can produce in time for the first phase of the European blending mandates in the period 2030–2032. If clarity is delayed and uncertainty persists, the timelines will shift. But I also want to put into perspective what is at stake. E-SAF is currently about six times more expensive than fossil kerosene. That sounds discouraging, but solar panels and offshore wind turbines were once unaffordable too. You have to go through the learning curve. If we build this plant three or four times, the last one will be significantly cheaper than the first. This requires courage and the willingness to take the first step. We are prepared to take that step. Of course, we want to take entrepreneurial risks ourselves, but the development of this market is bigger than what we as a company can organize. That’s why we ask the government to share risks and provide financial support for projects in the early stages. Only then will we be able to build a successful SAF value chain in the Netherlands and Europe."