Climate change and the unsustainability of fossil fuels are calling for cleaner energies such as methanol as a fuel. Methanol is one of the simplest molecules for energy storage and is utilized to generate a wide range of products. Since methanol can be produced from biomass, numerous countries could produce and utilize biomethanol. Here, we review methanol production processes, techno-economy, and environmental viability. Lignocellulosic biomass with a high cellulose and hemicellulose content is highly suitable for gasification-based biomethanol production. Compared to fossil fuels, the combustion of biomethanol reduces nitrogen oxide emissions by up to 80%, carbon dioxide emissions by up to 95%, and eliminates sulphur oxide emission. The cost and yield of biomethanol largely depend on feedstock characteristics, initial investment, and plant location. The use of biomethanol as complementary fuel with diesel, natural gas, and dimethyl ether is beneficial in terms of fuel economy, thermal efficiency, and reduction in greenhouse gas emissions.