India’s first port-based e-methanol plant to come up in Gujarat’s Kandla

Why in News?

India has taken a major step towards becoming a global supplier of green maritime fuel with the laying of the foundation stone for the country’s first port-based e-methanol production facility at the Deendayal Port Authority (DPA) in Kandla, Gujarat. The facility will have a total production capacity of 150 tonnes of e-methanol per day and will use renewable power, water and biogenic CO₂ as inputs. The project is expected to supply e-methanol to vessels operating on the Asia-Europe International Trade Corridor and strengthen India’s role in the global green shipping fuel market. It is a joint initiative of DPA and Assam Petro-Chemicals Ltd. (APCL), with a total investment of ₹2,300 crore and development planned in two phases.

About E-Methanol

E-methanol is a low-carbon synthetic fuel produced using green hydrogen and captured carbon dioxide (CO₂) with electricity generated from renewable sources such as solar and wind. It is part of the broader family of e-fuels, which are produced using renewable electricity.

The production process involves using renewable electricity to split water molecules into hydrogen and oxygen through electrolysis. The green hydrogen is then combined with CO₂ in a reactor to produce e-methanol. The resulting raw e-methanol contains water, which is subsequently separated during processing.

E-methanol can be used directly as a marine fuel or as a feedstock for producing other hydrocarbons. Since the hydrogen is produced using renewable energy and the CO₂ is captured and reused, e-methanol can significantly reduce lifecycle greenhouse-gas emissions compared with conventional fossil-based marine fuels. It can also be used in existing methanol-capable marine engines without requiring major modifications.

Key Features of the Kandla Project

The facility will have a total capacity of 150 tonnes per day and will be developed through scalable modules in two phases. The first phase will add 50 tonnes per day of capacity at an investment of ₹1,200 crore and is targeted for completion by January 2027. The complete project involves an investment of ₹2,300 crore and is expected to generate more than 3,500 direct and indirect jobs. The government expects production costs to be around US$750 per tonne, compared with a global rate of about US$1,300 per tonne.

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