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Methanol economy in India

This topic provides information about methanol economy in India.

India needs around 2900 cr litres of petrol and 9000 cr litres of diesel per year currently, the 6th highest consumer in the world and will double consumption and become 3rd largest consumer by 2030. Our import bill on account of crude stands at almost 6 lac crores.

Hydrocarbon Fuels have also adversely affected the environment with Green House Gas Emissions (GHG). India is the third highest energy related carbon dioxide emitter country in the world. Almost 30% pollution in cities like Delhi is from automobiles and the growing number of automobiles on the road will further worsen the pollution. The recent situation is alarming and time has come for the Govt to present a comprehensive road map to reduce the urban pollution in this country and stop pollution related deaths completely.

Hon'ble Prime Minister has set a goal for our Country to reduce the import bill by 10% by the year 2022. Crude oil imports drain our foreign exchange, putting enormous pressure on our currency & thereby weakening our bargaining power with the rest of the world.

Why Methanol?

Methanol is a clean burning drop in fuel which can replace both petrol & diesel in transportation & LPG, Wood, Kerosene in cooking fuel. It can also replace diesel in Railways, Marine Sector, Gensets, Power Generation and Methanol based reformers could be the ideal compliment to Hybrid and Electric Mobility. Methanol Economy is the 'Bridge' to the dream of a complete "Hydrogen based fuel systems".

Methanol burns efficiently in all internal combustion engines, produces no particulate matter, no soot, almost nil SOX and NOX emissions (Near Zero Pollution). The gaseous version of Methanol - DME can blend with LPG and can be excellent substitute for diesel in Large buses and trucks.

METHNAOL 15 (M15) in petrol will reduce pollution by 33% and diesel replacement by methanol will reduce by more than 80 %.

Methanol can be produced from Natural Gas, Indian High Ash Coal, Bio-mass, MSW, stranded and flared gases and India can achieve (through right technology adaptation} to produce Methanol @ Rs.19 a litre from Indian coal and all other feedstock. The best part world is already moving towards renewable methanol from C02 and the perpetual recycling of C02 into Methanol, say C02 emitted from Steel plants, Geothermal energy or any other source of C02, effectively "Air to Methanol".

During the last few years, the use of methanol and DME as fuel has increased significantly. Methanol demand is growing at a robust 6 to 8 % annually. World has installed capacity of 120 MT of Methanol and will be about 200 MT by 2025.

Currently Methanol accounts for almost 9% of transport fuel in China. They have converted millions of vehicles running on Methanol. China alone produces 65% of world Methanol and it uses its coal to produce Methanol. Israel, Italy have adopted the Methanol 15% blending program with Petrol and fast moving towards M85 & M100. Japan, Korea have extensive Methanol & DME usage and Australia has adopted GEM fuels (Gasoline, Ethanol & Methanol) and blends almost 56% Methanol. Methanol has become the choice of fuel in Marine Sector worldwide and countries like Sweden are at the forefront of usage. Large passenger ships carrying more than 1500 people are already running on 100% Methanol. African and many Caribbean countries have adopted Methanol cooking fuel and across the world Gensets and industrial boilers are running on Methanol, instead of diesel.

Renewable Methanol by capturing C02 back from the atmosphere is becoming very popular and is seen by the world as the "Enduring Energy Solution known to Mankind". Methanol is a significant solution to the burning problem of Urban pollution worldwide.

What India can do?

India has an installed Methanol Production capacity of 2 MT per annum. As per the plan prepared by NITI Aayog, using Indian High Ash coal, Stranded gas, and Biomass can produce 20 MT of methanol annually by 2025.  India, with 125 Billion Tonnes of proven Coal reserves and 500 million tones of Biomass generated every year & the huge quantities of Stranded & Flared gases has a huge potential for ensuring energy security based on alternate feedstock and fuels.

NITI Aaayog has drawn out a road map to substitute 10% of Crude imports by 2030, by Methanol alone. This requires approximately 30 MT of Methanol. Methanol & DME are substantially cheaper than Petrol and Diesel and India can look to reduce its fuel bill 30% by 2030.

NITI Aayog’s road map for Methanol Economy comprises:

  • Production of methanol from Indian high ash coal from indigenous Technology, in Large quantities and adopting regional production strategies and produce Methanol in large quantities @ Rs. 19 a litre. India will adopt C02 capturing technology to make the use of coal fully environment friendly and our commitments to COP21.
  • Bio-mass, Stranded Gas & MSW for methanol production. Almost 40% of Methanol Production can be through these feed stocks.
  • Utilization of methanol as well as DME in transportation – rail, road, marine and defence. Industrial Boilers, Diesel Gensets & Power generation & Mobile towers  are other applications.
  • Utilization of methanol and DME as domestic cooking fuel - cook stoves. LPG - DME blending program.
  • Utilization of methanol in fuel cell applications in Marine, Gensets and Transportation.

Methanol Benefits in Transportation sector

With very little modifications to existing engines (vehicles) and fuel distribution infrastructure, 15% of all vehicle fuels can be converted to Methanol & Di Methyl Ether (DME). India is shortly going to implement Methanol 15 % blending program with Petrol and cost of petrol is expected to come down immediately by 10% and M100 program for buses and trucks is also to be implemented shortly.

Global engine manufactures like Volvo, caterpillar, Mercedes and in collaboration with Indian players can manufacture these engines under the Make in India and will result in big FDI investments. The development of this sector will bring jobs in the engineering sector.

Methanol Benefits in Marine Sector

Worldwide due to emission regulations being implemented stringently by IMO (International Maritime Organisation), marine sector is shifting to Methanol as fuel of choice. Being a very efficient in liquid form and practically generating no SOx or NOx, Methanol is much cheaper than LNG and Bunker / Heavy Oil.  Sweden has already about 17 boats, ferrys, barges and a 1500 passengers cruise ship running on Methanol.

India will convert about 50 Nos of vessels in the Port sector and various vessels owned by government entities to operate on Methanol. This opportunity will also be used to standardise all the marine regulations both sea and inland in parity with International Maritime Organization rules and with global standards.

Methanol in Railways

Indian Railways consumes about 3 billion litres a year and the annual diesel bill is in excess of Rs. 15000 Crores. A Methanol locomotive prototype is being implemented by Indian Railways under a grant by Department of Science & Technology and once all 6000 diesel engines are converted to methanol (at very minimal cost of less than 1 crore a engine), the annual diesel bill can be reduced by 50%. Methanol conversion program in railways is complimentary to the goals of electrification in Railways.

Methanol & DME in Cooking fuel program

The cooking fuel program of Methanol liquid fuel and LPG-DME blending is a low hanging fruit for India. A 20% blending program with LPG, without any infrastructure modifications would result in a immediate savings of Rs.6000 Crores a year. Lakhs of rural women will cook healthy and Methanol supplied in canisters would ensure fuel supply in the remotest part of North East and Himalayas.

Progress made thus far

India has successfully converted a two wheeler engine, a Genset, power weeder (agriculture equipment) and is in process of converting many IC engines to Methanol, including railways and marine. Focus is on augmenting Methanol production capacity of existing producers like GNFC, RCF & Assam Petro and through various routes of production, India will target a Methanol production of at least 5 million tons by 2021. PSU’s like BHEL, CIL & SAIL are contemplating to produce Methanol though the coal route and Oil PSU’s through the stranded gas route. BHEL at Trichy, the Talcher Fertilizer plant can also produce Methanol in Large quantities in a short period of time.


India by adopting Methanol can have its own indigenous fuel at the cost of approximately 19 Rs. A litre at least 30% cheaper than any available fuel. Methanol fuel can result in great environmental benefits and can be the answer to the burning Urban pollution issue. At least 20% diesel consumption can be reduced in next 5-7 years and will result in a savings of Rs 26000 Crores annually. Rs. 6000 Crores can be annually saved from reduced bill in LPG in the next 3 years itself. The Methanol blending program with Gasoline will further reduce our fuel bill by at least Rs 5000 Crores annually in next 3 years. Make in India program will get a further boost by both producing fuel indigenously and associated growth in automobile sector adding engineering jobs and also investments in Methanol based industries (FDI and Indian). However, Coal and Stranded Gas linkages are import policy initiatives to be taken.

The final roadmap for ‘Methanol Economy’ being worked out by NITI Aaayog is targeting an annual reduction of 100 Billion $ by 2030 in crude imports.

Source : PIB

OM Dec 12, 2019 06:18 PM

Why there is only talk ?
While China have set up Methanol and DME plants like kirana shops, we are yet to make a single plant.

S Tamilmani Apr 19, 2019 04:45 PM

IIP Dehradun actually cleared methanol blending in 1992. However the availability situation of methanol changed in 2004 and the blending did not move forward. It is possible to produce Methanol at less than $275 from coal, but the willingness to implement the blending programme and also DME as an additive needs a lot more incentivisation.

Prasik Sep 12, 2018 12:36 PM

Yah.. Its best way to save our environment and country at the stage.Why do we guys r lagging from such worth-doing opportunity. I also have report by explaining, methnol can be works as fuel while mixing with gasoline.

Gopalan Jun 06, 2018 11:08 AM

Yes Its a great boon. But why it has not caught up with the private investment. Are the returns not sustainable? Why we are lagging so far When we are perpetually starved of petroleum and abundant in coal reserves.? There is a dire need and resource available but no efforts - highly paradoxical !!!

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