Biofuel Policy

[pib] Methanol Economy for India: Energy Security, Make in India and Zero Carbon foot print


From UPSC perspective, the following things are important:

Prelims level: Green House Gas Emissions, Methanol, COP21

Mains level: India’s energy needs and alternative fuel options


  • 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
  • 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
  • India aims 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
  • We need to have our own “Indian Fuel of global relevance”

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 complement to Hybrid and Electric Mobility
  • Methanol Economy is the “Bridge” to the dream of a complete “Hydrogen-based fuel systems”.

What Can India 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 India can produce 20MT of methanol annually by 2025

NITI Aayog’s roadmap 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 Co2 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 feedstocks
  •  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
  • Utilization of methanol in fuel cell applications in Marine, Gensets and Transportation

Methanol Benefits in

  • Transportation sector
  • Marine Sector
  • Railways
  • Methanol & DME in Cooking fuel program (Liquid fuel and LPG – DME blending program)

Way Forward

  • India by adopting Methanol can have its own indigenous fuel at the cost of approximately 19 Rs./litre
  • 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 26000 Crores annually
  • Make in India program will get a further boost by both producing fuels indigenously and the associated growth in automobile sector adding engineering jobs and also investments in Methanol based industries (FDI and Indian)

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