India Launches Kandla E-Methanol Plant for Shipping

India's Ministry of Ports, Shipping and Waterways (MoPSW) has launched the foundation stone for the country's first port-based e-methanol plant at Deendayal Port Authority (DPA) in Kandla, Gujarat. The plant, a significant step towards green maritime fuel production, is set to produce e-methanol at a competitive rate of $750 per metric tonne (mt), compared to global rates of approximately $1,300/mt, according to Ship & Bunker.

Investment and Partners

The project, valued at USD 239 million or INR 2,300 crore, is a joint venture between DPA and Assam Petro-Chemicals Ltd (APCL). DPA will hold a 76% share, while APCL will hold the remaining 24%, as reported by Manifold Times. The plant is expected to commence operations in two phases, with an initial capacity of 50 mt/day by January 2027 and an additional 100 mt/day by March 2027, according to Ship & Bunker.

Technological and Operational Details

The Kandla e-methanol plant will utilise renewable power, water, and biogenic CO2 to produce e-methanol, a process that aligns with the growing demand for green fuels in the shipping industry. This plant is designed to supply e-methanol to ships operating on the Asia-Europe International Trade Corridor, as stated in the Indian government's press release. The use of green hydrogen and captured carbon dioxide powered by renewable electricity marks a significant technological advancement, making e-methanol a viable alternative fuel for shipping.

Environmental and Economic Impact

The initiative is expected to have a substantial environmental and economic impact. According to the Indian government, the plant will produce green methanol at a much more competitive rate compared to other global producers, thereby supporting the green fuel infrastructure development at Kandla Port. The project also aims to contribute to India's broader goals of reducing carbon emissions and fostering sustainable maritime transport, as noted by Marine Insight.

Future Prospects and Challenges

The establishment of the e-methanol plant at Kandla Port represents a critical milestone in India's efforts to promote sustainable maritime transport. However, the project faces several challenges, including the need for additional infrastructure to support the distribution and storage of e-methanol. Additionally, the economic viability of e-methanol production and bunkering must be continuously monitored to ensure competitiveness in the global market.

What this means for operators: The launch of the e-methanol plant at Kandla Port presents ship operators with a more affordable and environmentally friendly option for fuelling their vessels on the Asia-Europe route. With production costs estimated at $750/mt, compared to global averages of around $1,300/mt, operators can expect significant savings while contributing to reduced emissions. However, operators must also be prepared to adapt their vessels and operations to accommodate the new fuel, ensuring compatibility with existing bunkering infrastructure and regulatory requirements.