India is taking another step towards green shipping and low-carbon fuels with the development of its first port-based e-methanol production facility at Deendayal Port Authority (DPA), Kandla, Gujarat.
The ₹2,300-crore project is being developed jointly by Deendayal Port Authority and Assam Petro-Chemicals Ltd (APCL), the Namrup-based Assam PSU. The plant will have a total capacity of 150 tonnes per day (TPD) and is intended to supply cleaner fuel to vessels operating on international maritime routes, including the Asia-Europe trade corridor.
For Assam, the project is particularly significant because it marks the expansion of APCL’s conventional methanol expertise into the emerging green and e-methanol economy.
What is Methanol?
Methanol, chemically known as CH₃OH, is a simple alcohol and an important industrial chemical.
It has several applications across the economy. It can be used as:
- A fuel and fuel blending component
- A feedstock for the chemical industry
- A solvent
- A raw material for plastics and paints
- A fuel for boilers and cookstoves
- A potential alternative marine fuel
- A feedstock for producing other chemicals and materials
Methanol is also highly toxic if consumed. It is therefore different from ethanol, the alcohol found in alcoholic beverages.
It is commonly used in industrial products such as paints, solvents and antifreeze. Antifreeze works by lowering the freezing point of water.
What is Green Methanol?
Not all methanol is produced in the same way.
The environmental impact of methanol depends largely on how it is produced and where its carbon comes from.
| Type of Methanol | Main Source |
| Brown methanol | Coal |
| Grey methanol | Natural gas |
| Blue methanol | Natural gas + carbon capture |
| Green methanol | Biomass or green hydrogen + captured CO₂ |
Green methanol generally refers to methanol produced using renewable or low-carbon inputs.
In the case of e-methanol, green hydrogen is combined with captured carbon dioxide using renewable electricity.
Simplified process
Renewable electricity → Green hydrogen → + Captured CO₂ → E-methanol
The Kandla project is designed around renewable power, water and captured biogenic CO₂ to produce e-methanol.
Why is Green Methanol Important for Shipping?
Shipping is one of the sectors where reducing dependence on conventional fossil fuels can be particularly challenging.
Large cargo ships travel thousands of kilometres and require energy-dense fuels.
This is where alternative fuels such as green methanol, green ammonia and other low-carbon fuels are gaining attention.
Methanol can be stored and handled as a liquid fuel using infrastructure that is comparatively familiar to the existing fuel industry.
For India, producing green methanol domestically could therefore help create a new green maritime fuel supply chain.
The Kandla plant is specifically designed to supply e-methanol to international vessels, linking India’s renewable-energy capabilities with its port infrastructure.
India’s First Port-Based E-Methanol Plant at Kandla
The foundation stone for the project was laid in September 2026 at Deendayal Port Authority in Kandla, Gujarat.
The project is a joint initiative of:
- Deendayal Port Authority (DPA)
- Assam Petro-Chemicals Ltd (APCL)
The two organisations will participate in the project in a 76:24 ratio, respectively. DPA’s contribution includes equity capital, land, desalinated water and renewable-energy inputs.
Key Project Details
| Parameter | Details |
| Location | Deendayal Port, Kandla, Gujarat |
| Project | Port-based e-methanol facility |
| Partners | DPA + Assam Petro-Chemicals Ltd |
| Total capacity | 150 tonnes/day |
| Total investment | ₹2,300 crore |
| Phase I | 50 TPD |
| Phase I investment | ₹1,200 crore |
| Phase I target | January 2027 |
| Phase II | Additional 100 TPD |
| Phase II investment | ₹1,100 crore |
| Phase II target | March 2027 |
| DPA:APCL contribution | 76:24 |
| Expected production cost | About US$750/tonne |
| Reported global benchmark | About US$1,300/tonne |
The project will be developed in two scalable phases. Phase I is planned to add 50 TPD capacity, followed by another 100 TPD in Phase II.
How Will the Kandla E-Methanol Plant Work?
The project will bring together several components of the green-energy value chain.
1. Renewable electricity
Renewable electricity will provide the energy required for producing green hydrogen.
2. Green hydrogen
Water can be split through electrolysis using renewable electricity to produce hydrogen.
This hydrogen becomes an important input for e-methanol production.
3. Captured biogenic CO₂
Captured carbon dioxide will provide the carbon component required to synthesise methanol.
4. E-methanol production
Green hydrogen and captured CO₂ are combined to produce e-methanol.
5. Port-based distribution
Because the facility is located within the port ecosystem, the fuel can be stored, handled and supplied to vessels.
This port integration is important because it connects production → storage → transportation → bunkering → international shipping within one broader ecosystem.
Why Kandla?
The location of the plant is strategically important.
Kandla is part of the Deendayal Port Authority, one of India’s major ports. Locating green fuel production at a port allows the fuel to be produced close to its potential consumers — ships.
Instead of transporting green methanol over long distances from an inland production facility, the port can potentially function as an integrated green-fuel manufacturing and bunkering hub.
The project is also intended to support vessels operating along major international shipping routes, including the Asia-Europe corridor and the Singapore–Rotterdam maritime route.
Assam’s Role in India’s Green Methanol Economy
One of the most important aspects of this project is the participation of Assam Petro-Chemicals Ltd (APCL).
APCL is based in Namrup, Assam, and already has experience in methanol production.
The Kandla project gives the company an opportunity to move beyond conventional methanol towards green and e-methanol production.
This is significant for Assam because the state’s industrial base can potentially participate in India’s emerging green-molecule economy.
The project therefore connects two different strengths:
Assam → Methanol and petrochemical expertise
Gujarat → Renewable energy, port infrastructure and maritime connectivity
Together, they create a green-fuel supply chain aimed at international shipping.
APCL’s participation was formalised through an MoU with DPA in January 2026.
Economic Significance of the Project
The Kandla e-methanol project is not only an energy project. It can potentially create an entire industrial ecosystem around green fuels.
According to the Ministry of Ports, Shipping and Waterways, the project is expected to create more than 3,500 direct and indirect jobs.
Associated activities can include:
- Green hydrogen production
- CO₂ capture
- Methanol manufacturing
- Storage
- Transportation
- Port handling
- Marine-fuel supply
- Equipment manufacturing
- Maintenance and logistics
Thus, green methanol can create opportunities beyond the production plant itself.
Green Methanol and India’s Maritime Decarbonisation
The global shipping industry is under increasing pressure to reduce greenhouse-gas emissions.
India’s geographical position gives it an opportunity to participate in this transition.
With a long coastline, major ports and expanding renewable-energy capacity, India can potentially become both a producer and supplier of alternative marine fuels.
The Kandla project is part of this broader transition towards green ports and green shipping.
The Ministry of Ports, Shipping and Waterways has also highlighted initiatives such as the Harit Sagar – Green Port Guidelines, renewable energy use at ports and promotion of alternative marine fuels.
Green Methanol and India’s Net-Zero Goal
India has set a target of achieving Net Zero emissions by 2070.
Meeting such a target requires decarbonisation across multiple sectors, including:
- Transport
- Industry
- Shipping
- Power
- Chemicals
- Heavy-duty mobility
Electrification may not be equally easy in every sector.
For example, long-distance shipping requires fuels capable of carrying substantial amounts of energy. This makes alternative fuels such as green methanol relevant to the decarbonisation discussion.
The Kandla project therefore fits into India’s broader effort to develop low-carbon fuels and green industrial infrastructure.
Green Methanol vs Conventional Methanol
The key difference is the source of energy and carbon.
| Feature | Conventional Methanol | E-Methanol |
| Energy source | Fossil fuels in many production pathways | Renewable electricity |
| Hydrogen source | Usually fossil-based | Green hydrogen |
| Carbon source | Fossil carbon | Captured CO₂ |
| Carbon intensity | Generally higher | Potentially much lower |
| Major relevance | Chemical industry and conventional fuel applications | Green shipping and low-carbon industry |
The exact environmental benefit depends on factors such as the electricity source, carbon source and overall production process.
What is NITI Aayog’s Methanol Economy Programme?
The Methanol Economy is another important concept for understanding India’s methanol strategy.
NITI Aayog’s Methanol Economy programme focuses on using methanol as an alternative fuel and chemical feedstock while reducing India’s dependence on imported fossil fuels.
The programme has also examined pathways for producing methanol from resources such as coal, natural gas, agricultural residues and industrial CO₂.
The newer emphasis on green and e-methanol adds another dimension to India’s methanol strategy by connecting methanol production with renewable energy and carbon capture.
Connection with the National Green Hydrogen Mission
The National Green Hydrogen Mission is another major policy framework relevant to India’s green-methanol push.
Green hydrogen can serve as an important building block for producing e-methanol.
The relationship can be understood simply:
Renewable Energy → Green Hydrogen → E-Methanol → Green Shipping
Therefore, development of green hydrogen infrastructure can support the expansion of other green molecules such as e-methanol.
This is why green methanol should not be viewed as an isolated fuel project. It is part of a larger green hydrogen and renewable-energy ecosystem.
Why This Project Matters for India
The Kandla e-methanol project has several potential implications.
1. Green shipping
It provides an alternative fuel option for international shipping and supports maritime decarbonisation.
2. Green-fuel exports
A port-based production facility can help India supply alternative fuels to international vessels.
3. Renewable-energy utilisation
Renewable electricity can be converted into a transportable chemical fuel.
4. Industrial diversification
Methanol producers such as APCL can move towards newer low-carbon production pathways.
5. Employment
The project is expected to generate more than 3,500 direct and indirect jobs.
6. Port-led development
Kandla can develop into a hub for production, storage and supply of green fuels.
7. Assam-Gujarat industrial linkage
The project connects Assam’s methanol expertise with Gujarat’s port and renewable-energy ecosystem.
8. Energy security
Developing domestic alternative fuels can contribute to India’s broader objective of reducing dependence on imported fossil fuels.
Challenges Associated with Green Methanol
Despite its potential, green methanol also faces challenges.
High production costs
Green hydrogen, renewable electricity, electrolysers and carbon capture infrastructure require significant investment.
Availability of green hydrogen
Large-scale e-methanol production requires a reliable supply of competitively priced green hydrogen.
Carbon source
The sustainability of e-methanol depends partly on the source and management of the captured CO₂.
Infrastructure
Ports need appropriate storage, handling, bunkering and safety infrastructure for alternative marine fuels.
Global demand
The economic viability of green-methanol projects will also depend on how quickly shipping companies adopt methanol-capable vessels and establish demand for low-carbon marine fuels.
Green Methanol: Prelims Facts to Remember
For UPSC/APSC Prelims, the following points are important:
- Methanol chemical formula: CH₃OH
- E-methanol: Also called electro-methanol
- Green hydrogen: Produced using renewable electricity
- E-methanol production: Green hydrogen + captured CO₂
- India’s first port-based e-methanol plant: Deendayal Port Authority, Kandla
- State: Gujarat
- Assam partner: Assam Petro-Chemicals Ltd, Namrup
- Total capacity: 150 TPD
- Total investment: ₹2,300 crore
- Phase I: 50 TPD
- Phase II: Additional 100 TPD
- DPA:APCL participation: 76:24
- Major application: Green maritime fuel
- Important policy linkages: Methanol Economy programme and National Green Hydrogen Mission
- India’s Net Zero target: 2070
Conclusion
India’s first port-based e-methanol facility at Kandla represents a shift from simply producing alternative fuels to building an integrated green-fuel ecosystem around ports.
For Assam, the project has an added significance. Through Assam Petro-Chemicals Ltd, the state’s existing methanol industry is becoming part of India’s emerging green-molecule economy.
The larger idea is simple: renewable electricity can be converted into green hydrogen, green hydrogen can be converted into e-methanol, and e-methanol can help decarbonise sectors such as international shipping.
For UPSC and APSC aspirants, the topic connects Indian Economy, Environment, Energy Security, Green Hydrogen, Maritime Sector, Industrial Policy and Assam-specific current affairs—making it a useful example of how India’s energy transition is creating new industrial value chains.
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