China's power system is moving toward diversification, greening, and intelligence.

By 2030, China will establish a diversified, green, and intelligent power system. As of the end of 2024, China's thermal power installed capacity reached 1.444 billion kilowatts, accounting for 43.14% of the country's total power capacity. In the future, thermal power will gradually transition to serving as both a foundational and flexible power source, with installed capacity expected to reach 1.6 billion kilowatts by 2030. Hydropower ranks second in China's power structure, with installed capacity projected to reach 540 million kilowatts by 2030. Wind power continues to grow robustly, with installed capacity expected to reach 1 billion kilowatts by 2030. Solar power, one of the fastest-growing new energy sources, is anticipated to achieve an installed capacity of 2 billion kilowatts by 2030, becoming the largest power source by scale. Meanwhile, nuclear power, biomass power generation, and others will collectively drive the diversification of China's power system. By 2030, green power capacity will account for approximately 70% of China's total installed capacity, with green power consumption further increasing and gradually becoming the dominant form of electricity consumption. Virtual power plants, smart microgrids, vehicle-grid interaction, and new energy storage technologies will propel the intelligent development of China's power system.

Green methanol is a key conversion medium in the development of the new power system.

Green methanol, also known as "liquid sunshine," is produced by generating green hydrogen from renewable energy sources (such as wind and solar power) and then synthesizing methanol by combining green hydrogen with captured carbon dioxide. This process enables the spatiotemporal conversion and storage of intermittent clean electricity, resulting in a liquid fuel that is easy to transport, store, and highly safe.

National policies continue to drive the development of the methanol vehicle industry. On September 1, 2023, China officially implemented the Standard for M100 Methanol Fuel for Vehicles. This year, the Ministry of Transport and nine other ministries jointly issued the Guidelines on Promoting the Integrated Development of Transportation and Energy, proposing measures to enhance the production capacity of green fuels for transportation, promote the construction of green fuel production bases, and prioritize the application of green fuels in the transportation sector, including the large-scale adoption of hydrogen-powered heavy trucks and other new energy transport vehicles. The guidelines also call for research into standards for the production, storage, and use of green fuels in transportation.

In terms of green methanol production capacity, China leads the world. As of August 2024, five domestic projects have been completed, with a total annual capacity of approximately 220,000 tons, using carbon dioxide and hydrogen to produce methanol. In terms of projects under construction, as of March 2025, projects with a total capacity of 4.91 million tons have commenced, primarily concentrated in Jilin, Heilongjiang, Inner Mongolia, and other regions. For planned projects, as of March 2025, the national planned capacity exceeds 50 million tons per year (if fully realized and used for vehicles, it could support 30–50 million vehicles). These projects encompass biomass, green hydrogen coupling, and wind-solar hydrogen production technologies.

Amid the development of the new power system, alcohol-based hydrogen vehicles are transitioning from low-carbon to net-zero carbon emissions.

Alcohol-based hydrogen vehicles can adopt various technical pathways, including methanol internal combustion engine vehicles, plug-in hybrid electric vehicles (with methanol internal combustion engines as power coupling devices), and range-extended electric vehicles (with methanol internal combustion engines as range extenders). Compared to traditional internal combustion engine vehicles, under the current methanol framework, methanol vehicles reduce PM2.5 emissions by 80%, improve energy efficiency by 21%, and cut carbon dioxide emissions by approximately 26%. With the rapid development of China's new power system, methanol vehicles will achieve net-zero emissions from energy production to energy application, similar to existing pure electric vehicles, which can form a green closed loop from green power production to green power consumption.

Alcohol-based hydrogen vehicles can address the application shortcomings of new energy vehicles in specific scenarios.

First, they offer wide temperature adaptability. New energy vehicles relying on power batteries face challenges in temperature adaptability. China's vast territory includes regions with significant temperature variations between summer and winter, making it difficult for new energy vehicles to meet winter usage demands. Alcohol-based hydrogen vehicles exhibit excellent cold-start performance and superior temperature adaptability (making them the optimal solution for net-zero carbon emission vehicles in northern regions).

Second, they provide high storage and transportation convenience. For hydrogen fuel cell vehicles, the storage and transportation of hydrogen pose significant challenges, and long-distance transport substantially increases costs. Alcohol-based fuels offer storage and transportation convenience comparable to gasoline and diesel.

Third, they decouple from the power system. Pure electric and plug-in hybrid new energy vehicles require grid connection for energy supply. With the development of megawatt-level fast charging and the rapid growth of new energy vehicle ownership, charging poses increasing challenges to grid load. Alcohol-based hydrogen vehicles refuel with alcohol-based fuels, decoupling energy supply from the power system.

Fourth, they offer higher refueling efficiency. The refueling efficiency of new energy vehicles is constrained by factors such as ambient temperature, power system stability indicators, and the number of charging vehicles. Alcohol-based hydrogen vehicles refuel similarly to traditional vehicles, significantly improving refueling efficiency.

Fifth, they address range limitations. New energy vehicles face range restrictions under low temperatures, high speeds, and heavy loads. Alcohol-based fuels have high volumetric energy density, substantially extending vehicle range and alleviating range anxiety.

Sixth, they enhance safety. Compared to hydrogen fuel cell vehicles, which face risks due to hydrogen's wide explosive limits, and power batteries, which are prone to thermal runaway and self-ignition, alcohol-based fuels offer higher safety, improving vehicle safety in applications.

Alcohol-based hydrogen vehicles demonstrate economic viability based on gray and blue methanol today and will achieve economic viability based on green methanol in the future.

Currently, China's methanol production is dominated by gray and blue methanol, while green methanol is in a rapid development phase. In recent years, methanol (coal-based) prices have fluctuated between 2,100 and 2,500 yuan per ton, with methanol refueling priced at 2.3 yuan per liter. Based on a passenger vehicle consumption of 9.0 liters per 100 kilometers, the average cost per kilometer is approximately 0.2 yuan, significantly lower than the 0.4–0.8 yuan per kilometer for gasoline-powered vehicles. In the future, with the rapid development of the new power system, green electricity prices are expected to drop below 0.1 yuan per kilowatt-hour, and carbon capture costs may fall to 200 yuan per ton, making green methanol production costs potentially lower than those of coal-based and natural gas-based methanol. This will drive the high economic viability of alcohol-based hydrogen vehicles using green methanol.

The development of the alcohol-based hydrogen vehicle industry requires coordinated efforts and innovation across the upstream and downstream industrial chains. Accelerated deployment of green methanol production, orderly infrastructure development, demonstration applications of alcohol-based hydrogen vehicles, and technological innovation will all contribute to ushering in new development opportunities for China's alcohol-based hydrogen vehicle industry.