Energy is the driver in the economic development of any country. It is expected that the developing countries like India will account for 25% hike in world-wide energy demand by 2040 due to the increase in the per capita income and rapid industrialization. Most of the developing countries do not have sufficient oil reserves and imports nearly all of their crude oil requirement. The perturbations in the crude oil price, sanctions on Iran and adverse environmental impacts from fossil fuel usage

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... e some of the concern. Therefore, developing countries have started investing heavily in solar and wind power and are considering hydrogen as a future energy resource. Hydrogen is possibly the cleanest fuel and produces only water vapour upon combustion. However, to tap the potential of hydrogen as a fuel, an entirely new infrastructure will be needed for transporting, storing and dispensing it safely, which would be expensive. In the transportation sector, a liquid alternate to fossil fuels will be highly desirable as the existing infrastructure can be used with minor modifications. Amongst the possible liquid fuels, methanol is very promising. Methanol is a single carbon atom compound and can be produced from wide variety of sources such as natural gas, coal, and biomass. The properties of methanol are conducive for use in gasoline engines since it has high octane number and flame speed. Other possible uses of methanol are: as a cooking fuel in rural areas, and as a fuel for running the fuel cells. The present study reviews the limitations in the hydrogen economy and why moving towards methanol economy is more beneficial.