Centre to come out with policy on methanol as alternative fuel soon

The Centre is likely to soon come out with a policy on the use of methanol as an alternative fuel, the Methanol Institute’s Chief Representative of India Prakriti Sethi has said. 

“Some positive policy developments for methanol fuel are expected in the coming months. We are optimistic as we are working with the Government,” Sethi told BusinessLine.    

Converting coal resources

NITI-Aayog, the Centre’s think-tank which is working in tandem with the Methanol Institute since 2016, has come up with the “Methanol Economy” programme aimed at reducing the country’s oil import bill, greenhouse gas (GHG) emissions, and converting coal reserves and municipal solid waste into methanol. 

Sethi said traditionally methanol has been produced from coal and natural gas with more output from the latter. “India and China have huge resources of coal to produce methanol. But we are now looking at producing bio-methanol from renewable sources such as agricultural wastes and municipal solid wastes,” she said. 

Another method of producing methanol is e-methanol from captured carbon dioxide and green hydrogen.

According to the NITI-Aayog, methanol derived from coal is the most economically viable option for India in view of the abundant reserves it has. It is available at a relatively cheaper than natural gas and crude oil, which are imported.

Cost-effective source 

Sethi said methanol is cost-effective compared with other sources such as ethanol and pointed out a study by NITI-Aayog comparing ethanol, methanol and gasoline. 

The study — based on internal research done by the Ministry of Coal in collaboration with private investors — coal gasification companies, and technical experts, found that methanol’s price is likely to be ₹22-25 a kg or ₹17.5-19.8 per litre (density of methanol – 0.791 kg/litre) based on a conservative estimate.

Methanol Institute, which has the world’s largest producers and distributors as its members, has been in the country since 2016 working with, besides Niti Aayog, the Ministries of Petroleum and Natural Gas, Renewable Energy and Road Transport and Highways. “But we are now looking at technical providers utilising methanol for fuel and power generation,” Sethi said. 

Research trials

The institute, along with NITI-Aayog, is focussing on ensuring energy security and cutting India’s burgeoning fuel bills. “In the past five years, we have seen significant growth in the production of indigenous resources to use methanol as an alternative,” she said. 

Since the Covid pandemic set in, the Centre has understood the dynamics of the production of renewable energy, shown interest and ensured its growth. “The private sector is also showing interest and is doing its own research trials and pilot project,” the Methanol Institute’s India representative said. 

“With the aim to ensure energy security and rise in current energy prices, there is a significant push on the cost-effectiveness of alternative fuels. So, companies are exploring methanol as an alternative fuel,” she said, adding that in 2018 the standards for M15 (mixing 15 per cent methanol with petrol) were laid out.

“Indian Oil Corporation Ltd has launched a pilot project on M15 in Assam and it is expected to have spill-over benefits to the other parts. The groundwork has been laid by the Automobile Research Association of India which has carried out M15 trials in two- and four-wheelers,” Sethi said. 

Cooking programme

But more importantly, a pilot project of methanol stoves — methanol cooking programme — was carried out in Assam and it was a success. Initially, 300 stoves were distributed for the pilot project conducted by NITI Aayog and Assam Petro Chemicals. 

“The cookstoves market is a low-hanging segment which will reap benefits to the local consumers including improved indoor air quality and reduced risk of health hazards. The results of the pilot have been satisfactory and we may see more projects on methanol stoves come onboard,” Sethi said. 

According to NITI-Aayog, the methanol cooking programme will now be scaled up to one lakh households in Uttar Pradesh, Maharashtra, Gujarat, Telangana, Andhra Pradesh, Goa, Karnataka, Jharkhand and Manipur.

The Methanol Institute India representative said methanol is an excellent carrier of hydrogen due to its chemical properties. “The Ministry for New and Renewable Energy (MNRE) is working on India Hydrogen Mission to explore how to mitigate challenges in transportation and storage and support the immediate adoption of hydrogen,” she said.  

Generator sets

The MNRE is looking at the commercial aspects and tariffs, besides other aspects. Sethi said the Delhi government had come up with a directive to utilise alternative fuel gensets to diesel generator sets, which were banned for causing pollution. 

“Methanol is one of the effective alternative energy solutions that can be included in the list of alternative sources. We have pitched to the Delhi government to look at methanol generator sets. Even other States which have higher pollution levels can consider it,” she said. 

Pilot projects

Kirloskar Oil Engines Ltd has begun carrying out trials of methanol generator sets. NITI-Aayog says Kirloskar has converted a 5 KW generator set to run fully on methanol. It is now working towards converting generator sets of 150-300 KVA/KW capacity, in collaboration with Dor Chemicals, Israel. Ashok Leyland has begun a pilot project on methanol. 

NITI-Aayog says besides, five methanol plants based on high ash coal, five dimethyl ether plants and one natural gas-based methanol production plant with a capacity of 20 million tonnes per annum, in a joint venture with Israel, have been planned to be set up. 

The Cochin Shipyard Limited is building three boats and seven cargo vessels for the Inland Waterways Authority of India to use methanol as a marine fuel.

Power generation

Sethi said methanol is also used in power generation and the Indian Army has been utilizing methanol fuel cells for some time. The National Thermal Power Corporation announced a pilot project in Vindhyachal on green methanol and is keen to scale it up, she said.  

According to NITI-Aayog, Thermax Ltd has successfully developed a 5-KW methanol-based reformer on a Direct Methanol Fuel Cell (DMFC). This module is being tested to replace DG sets in mobile towers. 

Sethi said private stakeholders were keen to understand the utility of methanol and are looking at these applications in India. Alternatively, the industry is looking at blending ethanol with methanol to help meet the 20 per cent ethanol target. 

“.The industry is looking at methanol to reduce the burden on ethanol supply and make the fuel more cost-effective.

Blend with ethanol

Ethanol-methanol blend is happening in other parts of the world. Italy has projects on A20 blend with 15% methanol, and 5% ethanol with gasoline engines. ,” she said. 

Efforts are on to blend methanol with diesel using additives. Tim Chan, Assistant Director, Government and Public Affairs (Asia & Middle East), Methanol Institute though there are technical difficulties methanol can be blended with diesel. “Successful trials have been done with 15 per cent methanol diesel blending,” he said. 

Sethi said to support the country in energy transition and achieve net-zero vision, the Centre should provide strong policy signals like Europe, which offers carbon credits, and incentives, and also penalises defaulters to the methanol industry. “There is a need to take the agenda on alternative fuels forward through a strong message to diversify India’s energy basket andMethanol will play its role in this,” Sethi said. 

NITI-Aayog said the methanol economy will create nearly five million jobs while ₹6,000 crore can be saved annually by blending dimethyl ether in LPG. For the consumer, there could be a ₹50-100 saving per cylinder.

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