Like Fischer-Tropsch liquids, biomethanol can also be produced from synthesis gas, derived from biomass feedstocks. However, methanol synthesis preferably takes place in a liquid phase, which results in a higher methanol yield, and methanol production requires a slightly different H2/CO ratio in the synthesis gas as compared to Fischer-Tropsch synthesis. Biomethanol is most suitable for application as a petrol substitute in spark ignition (or Otto) engines due to its high octane rating. Just like in the case of bioethanol, the lower vapour pressure, the lower volumetric energy density (about half of that of petrol) and the incompatibility with engine materials of biomethanol should be taken into account when applying it as an automotive fuel. Biomethanol can be blended up to 10-20% with petrol without the need for engine or infrastructure modifications.

However, additional safety measures need to be taken for handling of methanol since pure methanol burns with an invisible flame, unlike ethanol. Moreover, because methanol is poisonous, contact with skin and eyes should be avoided. Besides use in internal combustion engines, methanol can be used in fuel cells, directly in the Direct Methanol Fuel Cell (DMFC) and indirectly after conversion into hydrogen. The main challenges for further development of biomethanol are similar to those of the Fischer-Tropsch process, which have been discussed earlier in this section.