Promoting Green Methanol Usage

Methanol, a versatile chemical, serves various industrial purposes. Widely employed as a solvent, it is crucial in manufacturing chemicals, plastics, and pharmaceuticals. The global consumption of methanol in 2022 was 100 million tons, which is increasing consistently. Methanol presently is largely produced using hydrogen and carbon dioxide derived from steam methane reformation (SMR) process, making it carbon intensive.

With its cost-effectiveness and eco-friendly attributes, green methanol has emerged as a key decarbonization conduit in hard-to-abate sectors such as transportation, offering sustainable solutions and contributing to technological advancements.

Methanol – India Perspective

Methanol consumption has witnessed a notable increase in India in recent years, reflecting its diverse applications across industries. The chemical sector extensively employs methanol as a raw material for producing formaldehyde, acetic acid, and other essential chemicals. India consumed around 2.55 million tonnes of natural gas based methanol (grey methanol) in FY 22. A bulk of the 2.55 million tons of methanol, around 94%, was imported from gas-rich nations such as Saudi Arabia and Qatar, for a total import value of Rs. 7371 crore.

As India does not have sufficient natural gas, the import bill cannot be brought down via conventional means. However, due to its immense bioenergy and RE potential, India can make a concerted push to replace grey methanol with green methanol. Green methanol can replace grey methanol in traditional applications and open newer demand avenues for improving sustainability in sectors such as transportation.

Green Methanol Blending for Energy Security and Decarbonisation

The use of methanol as a fuel has the potential not only to reduce greenhouse gas emissions but also to lead to a reduction in crude oil and natural gas import bills. Compared to traditional fuels like gasoline and diesel, methanol blending would reduce GHG emissions by 20% in particulate matter, NOx, and SOx, thereby improving the urban air quality.

Realising the game-changing potential of Methanol for the Indian economy, NITI Aayog launched the methanol economy program with an aim to reduce the import bill and GHG emissions. As per studies and pilot projects conducted by NITI Aayog, Methanol can be blended in ratios ranging from 15% to 100% in existing fuels like petrol and diesel, which can not only help in accelerated decarbonization of transport sectors but also save significant foreign exchange for the country.

Similarly, Dimethyl Ether (DME), a derivative of Methanol, is another important application and can be blended to 20% in LPG, which could result in substantial savings, which can be passed on to end consumers.

The technology for using Methanol blended fuel in vehicles is well-proven and established. It may be noted that methanol blending is quite popular in China. China adopted national standards for 85% and 100% blending in 2009. China now uses Methanol as a vehicle fuel in blends ranging from five per cent to 100 per cent ('M5' to 'M100') and consumes almost 50% of global methanol production.

Several successful pilot projects under the methanol economy programme have also proved the viability of methanol blending in India. Methanol-blend fuels can be used for diesel-run locomotives, trucks, buses, cars, etc. Green methanol is also being considered for adoption as a marine fuel as pressure on shipping lines to decarbonize is increasing.

However, while ethanol usage has been mandatory with the Government's target of 20% blending in petrol by 2025, methanol blending is still optional and has yet to take off on a large scale. This is despite methanol having obvious advantages over ethanol as a blending fuel, such as no overlap/conflict with the food supply chain and a better emission profile.

Policy Imperatives for India

The methanol economy program of NITI Aayog, by focusing on methanol produced using coal gasification (brown methanol), has failed to harness the complete potential of a methanol-based economy. Importantly, brown methanol also does not provide emission reduction benefits. Green methanol, when compared to grey methanol or brown methanol, offers an emission reduction of up to 90%. Hence, green methanol, when viewed through the prisms of economics, sustainability, food security and national decarbonisation goals, offers a long-term blending solution compared to grey/brown methanol and ethanol.

With its potential to contribute to industrial and environmental objectives, green methanol consumption in India is poised for further expansion as the nation seeks innovative and sustainable solutions for its energy and industrial needs. However, to jump-start the green methanol economy, swift and concrete regulatory support is required.