Methanol Economy will create close to 5 million jobs through methanol production/application and distribution services, says a document of NITI Aayog which introduced 'Methanol Economy' programme. Additionally, Rs 6,000 crore can be saved annually by blending 20% DME (Di-methyl Ether, a derivative of methanol) in LPG. This will help the consumer in saving between Rs 50-100 per cylinder.

The programme is aimed at reducing India's oil import bill, greenhouse gas (GHG) emissions, and converting coal reserves and municipal solid waste into methanol.  According to NITI Aayog, the Methanol economy can cut down India's import bill by about 10 percent. Hence, they increased the methanol production capacity of the Assam Petrochemical Plant from 100 TPD to 600 TPD. Since April 2023, the plant in Assam's Namrup has been producing additional 500 tonnes of methanol per day, from which Bangladesh is importing methanol.

Methanol is a low carbon, hydrogen carrier fuel produced from high ash coal, agricultural residue, CO2 from thermal power plants and natural gas. It is the best pathway for meeting India’s commitment to COP 21.

“Although slightly lower in energy content than petrol and diesel, methanol can replace both these fuels in the transport sector (road, rail and marine), energy sector (comprising DG sets, boilers, process heating modules, tractors and commercial vehicles) and retail cooking (replacing LPG [partially], kerosene and wood charcoal). Blending of 15% methanol in gasoline can result in at least 15% reduction in the import of gasoline/crude oil. In addition, this would bring down GHG emissions by 20% in terms of particulate matter, NOx, and SOx, thereby improving the urban air quality,” the document states.

The Bureau of Indian Standards has notified 20% DME blending with LPG, and a notification for M-15, M-85, M-100 blends has been issued by the Ministry of Road, Transport and Highways. Test standards and plans for the M-15 blend are being evolved in consultation with the Indian Oil Corporation Limited, Automotive Research Association of India and Society of Indian Automobile Manufacturers. In the railway sector, RDSO is working towards blending methanol in the range of 5-20% through direct fuel injection in locomotives.