India’s total primary energy demand stood at 39 exajoules in 2022–23, with coal contributing 55 percent, crude oil 28 percent, natural gas 5.7 percent, and the remaining coming from renewable energy sources, hydroelectric power, and nuclear energy. To meet this demand, India has relied significantly on imports, including 17 percent coal, 85 percent crude oil, 44 percent natural gas, and 95 percent methanol.
Methanol is a carbon chemical compound that has the potential to reduce several energy imports, if produced domestically. It has versatile uses in feedstock for chemicals such as solvents in paint and pharmaceutical industries, raw materials (in the form of olefins) in plastic industries, energy applications, and wastewater and effluent treatments. It is predominantly produced through coal gasification and natural gas reforming. Producing 1 tonne of methanol requires approximately 1.5 tonnes of coal or 0.69 tonnes of natural gas.
Expanding the use of methanol across various energy applications such as transportation, power generation, and cooking fuel could significantly boost India’s methanol economy. This shift would also reduce the country’s reliance on imports of direct methanol, natural gas, and crude oil, thereby saving on import costs. According to the CSTEP study, producing methanol using captured CO₂ and green energy could repurpose 4.4 MMt of CO₂, create a demand for 0.7 MMT of green hydrogen, and drive a renewable electricity demand of 55 terawatt-hours (TWh). This approach could help the country save Rs 75 billion per annum on methanol imports. Additionally, if India mandates the use of 20 percent methanol in the transportation sector as a substitute for petrol and diesel, it could result in savings of Rs 2,520 billion on crude oil imports.
The article was republished by PSU Watch.
Cover image by Energy Watch
