NITI Aayog Considering Rs 5,000 Crore Methanol Economy Fund 

NITI Aayog is considering a proposal for the creation of a Methanol Economy Fund with a corpus of Rs 4,000-5,000 crore, as part of Narendra Modi government's efforts to increase the use of cleaner fuels and reduce India's crude oil import bill.

The government wants to set up three to four methanol processing plants, and at least one unit will be up and running in the next three years, NITI Aayog Member VK Saraswat said in a press conference in New Delhi on Tuesday. The government think tank will prepare a roadmap to increase the use of methanol fuel by December-end, Saraswat added.

"Methanol is one of the cleanest energy sources. It emits no soot, no particulate matter, no sulphur oxides, no nitrogen oxides," he added.

Under the roadmap, the NITI Aayog will propose ramping up facilities to convert coal, stranded gas, and biomass to methanol.

"We want to set up a methanol plant in coal fields of Jharkhand. We are planning to set up methanol plants near the coal fields itself so that transportation is not a problem," he said.

Highlighting that the regulatory approvals are almost ready, Saraswat said, "The Bureau of Indian Standards has certified methanol as a fuel, and the regulatory approvals for the same will be notified in another two weeks."

"The country will need to develop methanol manufacturing capacity of around 3 to 4 million tonnes to meet the expected demand," he added. Currently, 95 percent of India's methanol demand is met by imports.

As of 2014-15, the installed capacity of methanol in India was 0.47 million tonne, and the production was 0.21 million tonne.