Government’s think-tank Niti Aayog is planning to set up a Methanol Economy Fund with a corpus of Rs 4,000-5,000 crore. It aims to promote production and use of the clean fuel through this fund.
The Niti Aayog is intended to produce the fuel by converting high ash content coal into methanol and such a plant is likely to be set up by Coal India.
Niti Aayog is planning to move a Cabinet note on the methanol economy and soon it will set up production plants.
By December end, it is also planning to propose a roadmap to attain its target of increasing the penetration of Methanol as an alternative fuel to petrol and diesel.
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Objective of Methanol Economy Fund
Methanol Economy Fund will be utilized to promote the use of methanol fuel, which is safer, cheaper, and pollution free.
Methanol production plants will be set up using coal and stranded gas assets. In India methanol can be produced at Rs 16-21 per liter. It is expected to be commissioned in the next 3-4 years.
Benefits of Methanol
Methanol can be used as a transportation fuel, energy producing fuel and cooking fuel.
It could play a huge role in bringing down India’s oil import bill by an estimated 20% over the next few years.
Using methanol as a transportation fuel would require minimal alteration in the vehicles, unlike CNG.
China is the world’s largest producer of methanol.
Aayog's Future Plan
The Aayog is also working on converting certain diesel-powered rail engines to work on methanol. Plans are in progress to make sure that ships and boats used in the inland waterways initiative are also run on methanol.
The Aayog is also in talks with some auto-companies such as Tata and Volvo to manufacture buses running on methanol.