Today, the human civilization is very much dependent on fossil fuels, which make the blood and bone of this modern world. These precious natural resources, which form over the course of hundreds of years, are being consumed swiftly. In this alarming situation, it is very much necessary to think for a replacement, which fulfils the soci al needs without disturbing the environmental stability. One such approach discussed most over the years is ‘Hydrogen economy-Producing and using hydrogen as a clean fuel’, but there is no infrastructure for it. As it is a vol atile gas, so it needs to be handled and stored at high a pressure. Moreover, it is an inflammable gas, which makes its usage as a trans portation fuel difficult. A more potential and reasonable alternative, which is gaining importance is ‘Methanol Economy’ where methanol can be used as a source for transportati on, energy storage and raw material for artificial hydrocarbons and their commodities. It is an excellent fuel. Methanol prices today are competitive with hydrocarbon fuels (on energy basis). Development is noted on the commercial conversion of biomass to methanol by means of thermochemical mechanism. Adequate feedstock of natural gas and coal lies to empower the handling of exhaustible methanol as tran sition fuel to renewable methanol from biomass. This paper discusses methanol’s potential as an alternate of the hydrogen economy.