Unitel Technologies, Inc. successfully demonstrated its Merlin process for producing methanol from captured carbon dioxide (CO₂). The carbon capture and utilisation (CCU) technology is already operating at a plant in Danyang, South Korea, where it produces approximately 10,000 tonnes of methanol per year. The technology offers a potential pathway for converting industrial CO₂ emissions into a valuable chemical product while supporting lower-carbon methanol production.
Merlin Process Uses Captured CO₂ from Ethanol Plants
The standard Merlin process is designed to consume approximately 30,000 tons of captured CO₂ annually and produce up to 73,000 tons of blue methanol per year, equivalent to around 200 tons per day. According to Unitel, the process can be particularly attractive when integrated with existing ethanol plants. These facilities generate a continuous supply of fermentation-derived CO₂ and already have access to resources such as natural gas, electricity, skilled workers and industrial infrastructure. As a result, integrating methanol production with ethanol facilities could improve resource utilisation while creating an additional revenue stream from captured carbon dioxide.
Growing Demand Creates Market Opportunity
Methanol has applications across several major industries. In North America, key market segments include biodiesel production, formaldehyde, resins and adhesives, chemical intermediates, specialty chemicals and fuels and energy applications. US methanol demand reached approximately 11.5 million metric tons in 2025, with market prices ranging from around $1,000 to $1,400 per ton. The growing use of methanol as a marine fuel could significantly increase demand. Unitel expects North American demand to reach approximately 18 million tons per year by 2035.
CCU Could Offer Economic Advantages Over CCS
Unitel says its Merlin CCU technology can offer stronger economics than conventional carbon capture and storage (CCS). CCS typically generates a net profit of around $55–$65 per tonne of captured CO₂ after accounting for federal tax credits. In contrast, the Merlin process converts captured CO₂ into methanol, allowing companies to transform an emissions stream into a marketable product. This approach could therefore provide both carbon management and commercial value, particularly for industrial facilities that already have access to low-cost feedstocks and infrastructure.
Unitel Highlights Cost Challenge of Electrolytic Hydrogen
Another pathway for producing methanol involves reacting captured CO₂ with electrolytic hydrogen. However, Unitel President Dr. Ravi Randhava argues that the economics of this approach remain challenging. “At a nominal cost of $5 per kilogram for electrolytic hydrogen, this feedstock alone amounts to $1,000 per ton of methanol produced,” Randhava said. According to Unitel, the cost of electrolytic hydrogen can therefore make this production route less economically attractive. The company believes the Merlin process can provide a more commercially viable alternative by leveraging existing industrial resources and captured CO₂.
A Potential Route for Low-Carbon Methanol
The successful demonstration of the Merlin process highlights the growing potential of carbon capture and utilisation for methanol production. As reported by businesswire.com, by connecting CO₂ capture with an established industrial operation such as an ethanol plant, the technology could help companies convert captured carbon into a valuable chemical while supporting the transition toward lower-carbon fuels and products.
