NitiAayog’s Methanol Economy


NitiAayog’s Methanol Economy



NITI Aayog is planning to set up a Methanol Economy Fund in order to promote the production and usage of clean fuel. The Methanol economy Fund would be of Rs. 4000 to Rs. 5000 crores. It shall be used for the generation of safer, cheaper and pollution-free Methanol fuel. This pollution-free methanol will be manufactured by converting the coal with high ash content and stranded gas.


  • Methanol is the future of fuel in India.
  • The methanol economy is a future economy in which methanol and dimethyl ether replace fossil
  • fuels as a means of energy storage, transportation fuel, and raw material for synthetic
  • hydrocarbons and their products.
  • Across the world, methanol is emerging as a clean, sustainable transportation fuel of the future.

Methanol Economy Program


  • This programme is aimed at reducing India’s oil import bill, greenhouse gas (GHG) emissions, and converting coal reserves and municipal solid waste into methanol.
    • Methanol is a low carbon, hydrogen carrier fuel produced from high ash coal, agricultural residue, CO2 from thermal power plants and natural gas.

Benefits of methanol economy

  • Environment Friendly
  • Methnaol 15 (m 15) in petrol will reduce pollution by 33% & diesel replacement by methanol will reduce by more than 80%.
  • Burns efficiently in all internal combustion engines.
  • Cheaper than Petrol and Diesel and India can reduce fuel bill 30% by 2030. (Also cheaper than Ethanol)
  • Wide range of application including transportation sector, domestic cooking fuel and in fuel cells.
  • Cheaper than Petrol and Diesel and India can reduce fuel bill 30 rupees
  • Wide range of application including transportation sector, dome
  • Very little modifications to existing engines (vehicles) and distribution infrastructure required.

NITI Aayog’s road map for Methanol Economy

  • Substitute 10% of Crude imports by 2030, by Methanol alone
  • 20MT of methanol annually can be produced @ Rs. 19 a litre 2025 by using Indian High Ash coal, Stranded gas, and Biomass

Methanol Economy Research Programme (MERP)

Methanol Economy Research Programme (MERP)is being run by the Department of Science & Technology (DST) for production of Methanol from various sources including Indian coal and CO2 from thermal plants, steel plants etc.

→ The DST also launched its Methanol and Dimethyl ether (DME) programme in 2015.