India’s Methanol Imports to Come Down with the Introduction of Coal to Methanol Technology

India imported around 2.21 million tonnes of Methanol in 2020 which accounts for almost 80% of India’s total methanol demand. This shows that most of India’s Methanol demand is met through imports from Middle East which account for 75% of all imports to India. India’s Methanol demand is poised to grow with the increasing government initiatives towards supporting a Methanol Economy. 

NITI Aayog’s Methanol Economy programme is aimed at reducing India’s oil import bill as India is the world’s third largest oil importer. Moreover, the programme also aims at reducing greenhouse gas emissions, and converting coal reserves and municipal solid waste into methanol. 

As a part of this strategy, five methanol plants based on high ash coal, five DME plants, and one natural gas-based methanol production plant with a production capacity of 20 million tonnes per annum, in a joint venture with Israel, have been planned to be set up.

Under this plan, BHEL (Bharat Heavy Electricals Limited) has initiated India’s first pilot plant which converts high ash coal to methanol. The plant is based on indigenous technology developed by BHEL, Thermax and, IIT Delhi. 

The coal to Methanol technology involves conversion of coal to synthesis (syngas) gas, its cleaning, conditioning, and conversion to Methanol, and the Methanol purification. The technology will help the country to move towards a Methanol economy and reduce its oil imports. Moreover, with the introduction of indigenous technology, the overdependence on Methanol imports from Middle East is also set to reduce. With the targets of 15% blending with petrol, India aims on reducing its oil import bill by 15% with the help of Methanol production and blending. 

Methanol is a clean burning fuel which has potential to replace both petrol & diesel in transportation & LPG, Wood, Kerosene in cooking fuel. Methanol can also replace diesel in railways, marine sector, power generation etc. India’s total demand for Methanol stood at around 2.76 million tonnes in 2020 and is expected to grow at a healthy CAGR of 6% in the upcoming years.