Palladium catalysts are frequently employed in processes where methanol is an energy vector or carrier, being useful for the synthesis of methanol from mixtures of carbon dioxide and hydrogen (CO2/H2) or its steam reforming on demand. Results of synchrotron-based ambient pressure X-ray photoelectron spectroscopy for the adsorption of methanol on a Pd(111) model catalyst show a rich surface chemistry and complex phenomena that strongly depend on pressure and temperature. At low pressures (<10-6 Torr) and temperatures (<300 K), CO is the dominant decomposition product. As the pressure increases, cleavage of C-H, O-H, and C-O bonds is observed, and at elevated temperatures (400-600 K) the formation of CO and CHx/C fragments compete on the surface. Thus, existing reaction networks for methanol decomposition must be modified. Furthermore, surface and subsurface hydrogen (coming from PdHx) play a significant role in the stability and removal of CHx and C species.