Methanol: An affordable fuel

The NITI Aayog is advocating the possibility of moving towards a ‘Methanol Economy. This would help in reducing India’s oil import bill and cut down greenhouse gas (GHG) emissions. For this, coal reserves and municipal solid waste will be converted into methanol as coal reserves are abundant in India and relatively cheaper compared to natural gas or crude oil. The think tank suggests that methanol is the cheapest alternative fuel, compared to ethanol and petrol (gasoline).

“The cost of (petrol) gasoline including taxes is Rs 94.49 per litre and the cost of ethanol, including taxes on an energy equivalent basis with gasoline is Rs 69.9. Whereas the cost of methanol on an energy equivalent basis with gasoline is Rs 37.6.,” as per Methanol: A Competitive Alternate Fuel, by VK Saraswat and Ripunjaya Bansal. Further, the calorific value of ethanol is more than that of methanol. So, 1.28 litres of methanol would be needed to produce as much energy as a litre of ethanol. The paper adds that the government is yet to formalise a tax structure for methanol as there is no commercial plant in the country. “Unlike ethanol (which is derived from molasses and sugarcane juice), methanol will not ignite a food vs fuel security debate. Rather, using coal to produce methanol will help India monetise its domestic resources to reduce crude oil imports,” the analysts note.

Currently,  about 90% of India’s methanol requirement is met through imports. Further, methanol imports have increased over five years to 2018-19 in India. According to the study, blending of 15% methanol in petrol can help reduce the import of petrol/crude oil by 15%. Meanwhile, methanol production and distribution services could also create nearly 5 million jobs. This fuel will also curtail GHG emissions by 20% in terms of deleterious particulate matter – NOx, and SOx.