Methanol Blends to Replace Fossil Fuel; Saves 10% of Fuel Bills

The government has come up with a new plan of introducing methanol-blended fuel, an initiative that can bring down one’s fuel bill by a minimum of 10%, reduce vehicular pollution levels by 30%, and potentially save around Rs.5,000 crore on annual import bill. 

Following this idea, Road Transport and Highways Minister Nitin Gadkari have written to Petroleum Minister Dharmendra Pradhan requesting to make all efforts necessary so that methanol will be widely available for commercial use at fuel stations. 

Currently, up to 10% ethanol-blended fuel is being used in India for vehicles. However, the cost of producing ethanol is comparatively high, i.e. Rs.42/litre. In contrast, the cost of producing methanol or methyl alcohol at less than Rs.20/litre. Indian Oil Corporation has already been making M15 blended fuel with 15% methanol and 85% petrol; this is being offered for commercial use.

The ministry of road transport and highways has set up a regulatory framework and standards for the production of methanol blends such as M15, M85, and M100/neat methanol. The Society of Indian Automobile Manufacturers (SIAM) is in talks with Niti Aayog to build a possible road map to realise the methanol blend plan.

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Niti Aayog has successfully completed a 65,000 km of a trial run with M15 blended fuel. The results said that there is no need to tweak vehicles to run on methanol blended fuel. If the country moves to 15% blended fuel, an annual reduction of USD100 billion can be seen in crude imports by 2030. The blended fuel can be used both for transportation and cooking, it said.

The initiative can change the current status of India being the third-biggest oil importer globally. Currently, the crude oil imports of the country stand at Rs.5 lakh crore annually with close to 2,900 crore litre petrol and 9,000 crore litre diesel consumption. 

On the other hand, methanol blends can be produced at Assam Petrochemicals where the current production capacity is 100 tonnes per day. By April 2020, the company hopes to shoot up the production almost six folds to 600 tonnes per day. Soon, the commercial production of methanol from coal will begin in West Bengal and Jharkhand. The state governments have allotted a dedicated coal mine each for this purpose.

The government is planning to have an installed capacity of 3-4 million tonnes within the next 5-8 years.  This is to replace at least half of the fossil fuel requirement in the country.

For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in