The government is working on a plan to use methanol as fuel for inland waterway transportation and in army trucks as part of a strategy to cut dependence on imported fuel, a top official told ET.

It has initiated talks with Pune-based Deccan Water Treatment Pvt. Ltd. to undertake the conversion of diesel engines so that they can run on methanol, according to the official, as the government enhances focus on green fuels. Deccan Water Treatment will do this with the help of its Swedish joint venture partner.

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 cheaper than petrol and diesel and also ethanol.

Apart from cutting India’s oil NSE -0.27 % import bill, the use of methanol is also seen as a way of meeting India’s commitment at the Paris Climate Conference.

“NITI Aayog is facilitating conversion of inland waterways at Haldia, Varanasi and Allahabad under this project,” the official said.

The project will be implemented through Deccan ScandiNAOS India, a 70:30 joint venture between Deccan Water Treatment and ScandiNAOS, with the latter being the technology partner.

Niti Aayog has drawn a plan to replace 20% of crude imports with methanol, which will help bring down pollution in the country by more than 40%. Under the plan, 500 barges will be converted to run on 100% methanol, replacing heavy oil or bunker oil, resulting in reduction in pollutants being released into rivers and seas.

This could be followed by conversion of army trucks to run on methanol and even diesel railway engines, as India scales up domestic production of methanol.

“Deccan ScandiNAOS India aims to drive the ‘methanol economy’ programme in India, in line with the government’s initiative to promote and adopt alternative fuels in the country, by providing design and supply methanol fuel solutions for internal combustion engines as well as conversion for existing conventional fuel engines to run on methanol,” Animesh Sarkar, chairman of the JV company said.

It is estimated that the cost of gasoline including taxes is ₹94.49 per litre. The cost of ethanol including taxes on an energy equivalent basis with gasoline is ₹69.9, while the cost of methanol on an energy equivalent basis with gasoline is ₹37.6, making methanol more economical compared with ethanol and petrol.

Production of methanol from coal is the most economically viable option for India, with the other sources being natural gas, naphtha, biomass, etc.

Source : Economic Times