India to set up first port-based e-methanol facility at Kandla for Rs 2,300 cr

In a boost to maritime decarbonisation, the government on Saturday laid the foundation stone for its first port-based e-methanol production facility at Kandla, involving an investment of Rs 2,300 crore.

The 150-tonne-per-day green fuel plant - a joint venture between the Deendayal Port Authority (DPA) and Assam Petro-Chemicals Ltd (APCL)-will supply cleaner fuel to international vessels navigating the busy Asia-Europe trade corridor.

India is moving up as the world's leading maritime power and it will now power the world's ships with green energy, Union Shipping Minister Sarbananda Sonowal said.


Sonowal was speaking at an event to lay the foundation stone for the country's first port-based e-methanol plant at Deendayal Port Authority (DPA) in Kandla, Gandhidham, Gujarat.

According to an official statement, the 150-tonne-per-day plant will use renewable power, water and biogenic CO2 to produce e-methanol, a green fuel that will enable cleaner shipping, and supply it to vessels plying on the Asia-Europe International Trade Corridor, one of the world's busiest trade routes.

The project positions India as an exporter of green fuel to global shipping, it added.

According to the statement, the plant will position India as a global leader in the production and supply of green fuel, and will produce green methanol at a much more competitive rate compared to other global producers, just USD 750 per tonne, against a global rate of USD 1,300 per tonne.

The Rs 2,300 crore plant is a joint initiative of Deendayal Port Authority (DPA) and Namrup-based Assam Petro-Chemicals Ltd. (APCL), and will be installed in phases, as scalable modules.

The statement said phase I of the project will add 50 tonnes per day of capacity at an investment of ' ¹1,200 crore, targeted for completion by January 2027, followed by Phase II, which will add a further 100 tonnes per day at an investment of ' ¹1,100 crore, targeted for March 2027, taking the total investment to ' ¹2,300 crore.

The capital contribution between the two partners stands at a ratio of 76:24 between DPA and APCL. DPA's contribution to the project includes equity capital of ' ¹567.32 crore, 75 acres of land, desalinated water, and renewable energy in the form of green hydrogen.

The statement said it shall be amongst the largest e-methanol production facilities in India and shall create more than 3,500 direct and indirect jobs. It shall stimulate the complete green energy value chain in and around Kandla, including transportation, storage, supply and other associated ancillaries involved in production of green molecules.