Methanol Economy Fund is established by NITI Aayog to decrease India’s dependence on foreign oil, cut greenhouse gas (GHG) emissions, and produce methanol from municipal solid waste and coal reserves. Methanol is a low carbon, hydrogen carrier fuel made from natural gas, agricultural waste, CO2 from thermal power plants, high ash coal, and agricultural leftovers. It is the most effective strategy to fulfil India’s COP 21 pledge.

Methanol Economy Fund is one of the important topics for the UPSC IAS Exam. It also covers a significant part of the Environment subject in the General Studies paper-3 syllabus. In this article, we shall cover in detail about Methanol Economy, methanol production in India and its relevance for the UPSC exam.

Methanol Economy Fund UPSC Notes: Download PDF here!

Methanol Economy Fund

The Methanol Economy Fund is worth between Rs 4,000 and Rs 5,000 crore. It was put into place to encourage the creation and consumption of clean fuel. The government intends to produce fuel by turning high-ash coal into methanol, and Coal India is anticipated to build such a facility. Methanol fuel is cheaper, safer, and pollution free. Under the methanol economy fund established by NITI Aayog, methanol production facilities will be established using coal and stranded gas assets. Methanol may be generated in India for Rs. 16–21 per litre.

What is the Methanol Economy?

Methanol Economy is the ‘gateway’ to the dream of a complete “Hydrogen based fuel system”. According to the Indian government, the final “Methanol Economy” road map being developed by NITI Aaayog aims to reduce oil imports by $100 billion annually by 2030. The creation of a “Methanol Economy Fund” is another idea being considered to promote this renewable alternative fuel.

What is Methanol?

Methanol (CH3OH) is one part carbon, four parts hydrogen, and one part oxygen. it is a fuel that burns cleanly and can be used in place of gasoline and diesel for transportation as well as LPG, wood, and kerosene for cooking.

Uses of Methanol

• Methanol can be used in place of diesel in the railroad, marine, Genset (backup), and power generation industries, and methanol-based reformers may be the perfect addition to hybrid and electric vehicles.
• All internal combustion engines can burn methanol efficiently, and it emits nearly no SOX and NOX and no particulate matter (Near Zero Pollution). In large buses and vehicles, the gaseous form of methanol, known as Dimethyl ether (DME), can blend with LPG and make an efficient replacement for diesel.
• Methanol in gasoline will cut pollution by 33%, and methanol replacing diesel will cut pollution by more than 80%.
• Natural gas, Indian High Ash Coal, biomass, Municipal Solid Waste (MSW), stranded and flared gases and India can achieve produce it with the proper technological adaptation.
• The use of methanol and DME as fuel has greatly expanded during the past few years. The demand for methanol is rising quickly, between 6 and 8% annually.
• Methanol’s installed capacity is 120 MT, and by 2025, that capacity will be increased to around 200 MT.

India’s Steps Towards Methanol Economy

India is planning significant changes in the methanol economy. India’s steps toward a methanol economy fund are listed below:

• The installed Methanol Production capacity for India is 2 MT annually.
• According to the NITI Aayog plan, by 2025 20 MT of methanol can be produced yearly using Indian High Ash coal, Stranded gas, and biomass.
• India has a significant opportunity to ensure energy security using alternative feedstock and fuels with 125 billion tonnes of confirmed coal reserves, 500 million tonnes of biomass produced annually, and enormous amounts of stranded and flared gases,
• By 2030, NITI Aaayog has created a roadmap to replace 10% of crude oil imports with methanol. This calls for about 30 MT of methanol.
• India can aim to cut its fuel costs by 30% by 2030 by using Methanol and DME, which are significantly less expensive than Petrol and Diesel.

Also, check out the article on COP24 UNFCCC for UPSC preparation!

मेथनॉल इकोनॉमी फंड के बारे में हिंदी में भी पढ़ें!

NITI Aayog’s ‘Methanol Economy’ Programme

NITI Aayog has laid out a road map for India for the “Methanol Economy” On World Environment Day, 2018

• Methanol is produced in huge numbers from Indian high ash coal using indigenous technology, and local production methods, at a cost of Rs.19 per litre. India will employ C02 capture technology to properly uphold its COP21 commitments by making coal fully environmentally friendly.
• Methanol production done by using MSW, stranded gas, and biomass is capable of producing close to 40% of the world’s methanol.
• Use of methanol and DME(Di-methyl Ether) in rail, road, marine, and defence transportation. Other applications include power generation, mobile towers, diesel gensets, and industrial boilers.
• DME and Methanol can also be utilized in cookstoves for domestic cooking.
• Another program for combining LPG and DME will be also installed and methanol will also be used as fuel cell applications in Marine, Gensets, and Transportation.

Methanol Economy Research Programme (MERP)

Methanol and Dimethyl Ether (DME) can be crucial to controlling growing imports and increasing India’s energy security,

• Department of Science and Technology (DST) initiated its MDME program in September 2015 after realizing the potential of employing methanol and DME as transportation fuel for rail, maritime, and road transportation.
• The Methanol Economy fund has the potential to reduce India’s dependence on foreign oil while also addressing the issue of excessive CO2 emissions contributing to Global Warming and Climate Change. DST actively participated in the development of the Methanol DME and Di methyl ether Roadmaps.
• DST launched a significant development effort to produce methanol from various sources, such as Indian coal and CO2 from thermal plants and steel mills.
• The main goal of the program is to utilize production methods that have not yet been utilized but have the potential to do so in the future and require research interventions, such as the creation of novel catalysts, the use of methanol in direct methanol fuel cells, the creation of engines that run on methanol and DME, etc.

Benefits of Methanol

Methanol is also known as wood alcohol and it is used in many applications. The whole crux of the methanol economy fund is initiated because methanol is highly beneficial. Certain benefits of methanol are listed in the table below:

Way Forward

• India can develop its own domestic fuel at a cost of about Rs 19 by utilizing methanol. Every accessible gasoline is at least 30% more expensive per litre.
• Methanol fuel has significant environmental advantages and may be the solution to the pressing problem of urban pollution. In the next 5 to 7 years, at least 20% of diesel consumption can be cut, saving Rs. 26000 crores annually.
• In the upcoming three years, there could be yearly savings of Rs. 6000 crores due to lower LPG costs. Our fuel costs would be significantly reduced by at least Rs 5000 crores yearly over the next three years thanks to the methanol and gasoline blending scheme.
• The Make in India initiative will benefit from both the production of fuels domestically and the growth of the automotive industry that results in the addition of engineering jobs as well as investments in methanol-based sectors.

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