1 Status and Trends in Methanol as a Global Transportation Fuel February 23, 2016 I Reykjavik Ben Iosefa, VP, Global Market Development & Stakeholder Relations

2 2 Overview Status and Trends in Methanol as a Global Transportation Fuel Road Fuels Marine Fuels

33 Road Fuels

4 China Continues to Lead Growth of Methanol Fuel Blending Key growth drivers: Provincial standards & emissions reduction (PM 2.5) Economics, Energy self-sufficiency M85 & M100 national standards issued in 2009; M85-M100 National Pilot Program Expanding 14 provinces have local standards (mainly low methanol content blends). Growing gasoline demand and provincial standards will further boost methanol fuel demand Province Local Methanol Gasoline Standards Implemented Since GansuM15 & M GuizhouM HebeiM15 & M HeilongjiangM JiangsuM LiaoningM ShaanxiM15 & M ShandongM ShanghaiM ShanxiM5, M15, M85 & M SichuanM XinjiangM15 & M ZhejiangM15, M30 & M NingxiaM15 & M302014

5 Methanol Fuel Blending Growing Outside China Egypt China Commercial / near-commercial Assessment stage Australia Israel New Zealand Trinidad & Tobago U.K. Netherlands Denmark Iran Uzbekistan Significant methanol fuel blending activity developing outside China Turkmenistan Iceland Switzerland Azerbaijan Alaska Russia U.S. Chile India

6 6 Advanced Commercial Activities - Methanol Fuel Blending Israel M15 demonstrations completed (1 million km+) M15 draft national standard issued late 2015 Testing M70-85 in Flex fuel vehicle’s Australia Led by Coogee / Methanex a partner Road trials & testing programs completed Planning GEM8 introduction; GEM15 & GEM56 in the future Egypt Egyptian General Petroleum Corp & Methanex 23-vehicle M-15 pilot in 2016 Environmental benefits, Subsidy reduction Source: Fuel Choices Initiative, Prime Minister's Office, Israel

7 7 Europe 3% methanol in European gasoline standards Netherlands & UK blending methanol Potential 10-year tax support in UK could be game changer for methanol GEM fuels an official fuel at World Rally Championship Renewable methanol key enabler United States Momentum building; focus on advocacy efforts Shale Gas Open Fuel Standard, Fuel Choice for American Prosperity and Security Act Project Optima California oil reduction targets Methanol Fuel Blending – Europe & U.S.

8 8 Other Global Commercial Developments DMCC (Diesel-Methanol Dual Fuel) China (Tianjin University) Early stages of commercialization Large efficiency gains reported Dimethyl Ether (DME) Volvo / Heavy-duty trucks Ford/German gov’t project for passenger vehicle market (search for diesel substitutes) Methanol Fuel Cells Europe’s first methanol filling station in Aalborg, Denmark (Aug. 2015) Serenergy fuel cell as electric vehicle range extender Vulcanol-powered; Mx a partner

9 99 Marine Fuels

10 Regulations Leading to Commercialization of Methanol as a Marine Fuel IMO – ECA’s 2016 & Global Sulfur Regulations 2020/25; Tier III NOx regulations for new vessels in 2016 in North America Regional regulations developing – China ECA’s(Dec 2015) Long-term CO 2 – Renewable methanol commercialization important Stena Germanica – world’s first methanol powered ferry Methanol is an ultra-clean fuel which can meet increasingly stringent emissions regulations

11 Methanex’s Waterfront Shipping Launching 7 New Methanol Flex-fuel vessels in 2016 MAN 2-stroke, ME-LGI Methanol flex fuel engines 7 x 50,000 dwt vessels April – October 2016 delivery dates First two vessels launched in Korea April 2016 Solid business case – modest incremental cost offset by flex-fuel cost savings Classification Bureaus - DNV-GL, Class NK

12 MethaShip Ship design for methanol cruise ship and ro-pax ferry German Government funded Meyer Werft (shipyard), FSG (shipbuilder), Lloyd’s, MAN, Caterpillar, HELM LeanShips European Commission sponsored ; Methanex is a partner Promote more efficient and less polluting ships Commercialize small-midsized ships /engines China Green energy key tenant of China 13 th 5-year plan ( ) Ministry of Transport (MOT) – China ECA’s being phased-in ; backing cleaner marine fuels Methanex partnering with MOT and other stakeholders to execute methanol pilot Methanol Marine Commercialization Projects Growing

13 Conclusions Methanol Fuel growth led by China ~ decade ago Expanding to new regions and applications Increasingly, regulations requiring cleaner & lower carbon fuels driving growth GHG reduction is a growing in importance – renewable methanol development key

Thank You