India’s First Port-Based E-Methanol Plant to be Set Up in Kandla
Foundation stone for India’s first port-based E-Methanol production plant has been laid at Deendayal Port Authority (DPA) in Kandla, Gujarat. This upcoming facility will have a production capacity of 150 tonnes per day, and the project will be developed with an investment of Rs. 2,300 crore.
The port infrastructure of Kandla combined with this e-methanol facility is aimed at serving the emerging demand for cleaner marine fuels.
What is E-Methanol and Why is it Important?
E-methanol (electro-methanol) is a low-carbon fuel produced by using renewable electricity to split water into green hydrogen (electrolysis), and then combining this green hydrogen with captured carbon dioxide. This e-methanol can have a substantially lower lifecycle carbon footprint than conventional fossil-based fuels and methanol.
E-methanol is increasingly being explored as an alternative to conventional fossil fuels, especially in hard-to-decarbonise sectors such as maritime shipping. Its use as a cleaner marine fuel makes e-methanol especially relevant for port-led energy transition projects such as the one planned at Kandla.
The planned Kandla plant will use renewable energy, water, and biogenic CO₂ to produce e-methanol.
DPA and Assam Petrochemicals JV will Develop E-Methanol Plant
The E-Methanol plant will be developed through a joint venture between Deendayal Port Authority (DPA) and Assam Petrochemicals Ltd. (APCL).
DPA will hold a 76% stake in the JV, while Assam Petrochemicals will hold the remaining 24%. Both companies will contribute to the project in the same ratio.
DPA will contribute Rs. 567.32 crore as equity capital and provide 75 acres of land, desalinated water, green hydrogen, and port infrastructure, including storage facilities and pipeline connectivity. Assam Petro-Chemicals will establish and operate the e-methanol production facility within the port complex.
E-Methanol Plant to Be Developed in Two Phases
The investment of 2,300 cr will be split in two phases. Phase I of the project will involve an investment of Rs. 1,200 crore and will add 50 Tonnes Per Day (TPD) of e-methanol production capacity. The first phase is expected to be completed by January 2027.
Phase II will involve an investment of Rs. 1,100 crore and will add another 100 TPD of capacity. The second phase is targeted for completion by March 2027.
The upcoming E-Methanol facility is expected to create around 3,500 direct and indirect jobs.
Importance of the Kandla E-Methanol Project
E-Methanol that will be produced at the Kandla plant is expected to cost around USD 750 per tonne, which is substantially lower in comparison to the global indicated price of around USD 1,300 per tonne. This cost differential, if achieved, will strengthen India as a supplier of green marine fuels.
The target market for this facility is Asia-Europe International Trade Corridor, of which the Singapore-Rotterdam maritime route is a primary segment. This route is one of the busiest cargo lanes, moving thousands of international merchant vessels between East Asia and Europe every year. Because Kandla is located next to these major shipping lanes, large container ships can stop to refuel with e-methanol without diverting from their routes.
This e-methanol project is part of DPA’s wider push to develop Kandla as a green marine-fuel hub, supporting India’s growing role in the production and supply of alternative fuels for international shipping.
