India's first port-based e-methanol plant to come up at Kandla
Can an Indian port make green fuel for the ships that call at it?
Published 27 September 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
The foundation stone of India's first port-based e-methanol plant was laid at Deendayal Port Authority (DPA), Kandla, in Gujarat on 26 September in the presence of Union Ports, Shipping and Waterways Minister Sarbananda Sonowal, Gujarat Chief Minister Bhupendra Patel and Assam Chief Minister Himanta Biswa Sarma. The Rs 2,300 crore facility will make 150 tonnes of e-methanol a day from renewable power, water and biogenic carbon dioxide, to fuel vessels on the Asia-Europe trade corridor.
The plant is a joint venture of DPA and Assam Petro-Chemicals Ltd (APCL), Namrup, with capital in a 76:24 ratio. DPA's share includes Rs 567.32 crore of equity, 75 acres of land, desalinated water and green hydrogen. Phase I (50 tonnes a day, Rs 1,200 crore) is targeted for January 2027 and Phase II (100 tonnes a day, Rs 1,100 crore) for March 2027. The project claims a production cost of about USD 750 a tonne against a global rate of about USD 1,300, and over 3,500 direct and indirect jobs.
E-methanol is made by combining green hydrogen, produced by splitting water with renewable electricity, with captured carbon dioxide. When that carbon is biogenic, from recent biological sources, the fuel's carbon cycle is roughly closed. Methanol is liquid at normal temperature and pressure, so it can be stored and bunkered more easily than hydrogen or ammonia. The push aligns with the International Maritime Organization's goal of net-zero emissions from international shipping by around 2050. At about 55,000 tonnes a year, however, the plant is a demonstration of feasibility rather than a large-scale solution.
Prelims facts
- E-methanol is produced by reacting green hydrogen with captured carbon dioxide; green hydrogen is made by electrolysis of water using renewable electricity.
- Kandla port was renamed Deendayal Port; it is a major port on the Gulf of Kutch in Gujarat, now run by the Deendayal Port Authority.
- The International Maritime Organization, headquartered in London, is the UN specialised agency that regulates international shipping, including emissions.
Quick recall
- Where is India's first port-based e-methanol plant being built?
- Deendayal Port Authority, Kandla, Gujarat.
- What is its planned capacity?
- 150 tonnes per day.
- What is the total investment?
- Rs 2,300 crore.
- Who are the joint venture partners and in what ratio?
- Deendayal Port Authority and Assam Petro-Chemicals Ltd, 76:24.
- What are the plant's three main inputs?
- Renewable power, water and biogenic carbon dioxide.
- What production cost does the project claim?
- About USD 750 a tonne, against a global rate of about USD 1,300.
- Which trade route will the fuel mainly serve?
- Vessels on the Asia-Europe trade corridor.
- Why is methanol easier to handle than hydrogen on ships?
- It is liquid at ambient temperature and pressure, so it needs no cryogenic storage.
Prelims practice question
Consider the following statements about e-methanol:
1. It is produced by combining green hydrogen with captured carbon dioxide.
2. It must be stored at cryogenic temperatures, like liquid hydrogen.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Show answer
Answer: (a) 1 only. E-methanol is synthesised from green hydrogen and CO2. Methanol is a liquid at ambient temperature and pressure, which is why shipping finds it easier to handle than liquid hydrogen.
Use this in UPSC Mains: previous-year questions
Recurring theme: Clean energy transition and energy independence
- How to use this
Use the Kandla plant as a concrete example of clean technology, green hydrogen combined with biogenic carbon, producing a domestic fuel that can replace imported marine fuel.
- India's first port-based e-methanol plant at Deendayal Port, Kandla (foundation laid 26 September 2026) will make 150 tonnes a day from renewable power, water and biogenic CO2 at a cost of ₹2,300 crore.
- With biogenic CO2, from recent biological sources, the fuel's carbon cycle is roughly closed; the project claims about USD 750 a tonne against a global USD 1,300.
- Limit to note: at about 55,000 tonnes a year it is a demonstration of feasibility, not a large-scale solution.
- How to use this
Use e-methanol to show renewable energy reaching hard-to-electrify sectors like shipping, while noting the scale gap that tempers any target-based optimism.
- The Kandla plant (a DPA and Assam Petro-Chemicals joint venture, 76:24) uses green hydrogen from renewable electrolysis; Phase I is targeted for January 2027 and Phase II for March 2027.
- It aligns with the IMO's goal of net-zero emissions from international shipping by around 2050 and creates demand for the National Green Hydrogen Mission.
- Scale gap: about 55,000 tonnes a year against an estimated 540 million tonnes a year of green methanol needed to replace all marine fuel.
Mains practice question
Decarbonising shipping is essential for India's climate goals and its ambitions as a maritime power. Examine the potential and limitations of green fuels such as e-methanol, with reference to the Kandla project. (250 words)
Model answer
International shipping carries most of world trade and its emissions fall outside national inventories, so the International Maritime Organization (IMO) is steering it towards net-zero by around 2050. India's first port-based e-methanol plant at Deendayal Port, Kandla, with 150 tonnes a day of capacity and Rs 2,300 crore of investment, is an early step.
Why e-methanol
- Clean chemistry: made from green hydrogen and captured CO2; with biogenic CO2 the carbon cycle is roughly closed.
- Easy handling: liquid at ambient conditions, stored in near-conventional tanks and bunkered with existing procedures, unlike cryogenic hydrogen or toxic ammonia.
- Port-based production: cuts the cost and emissions of shipping fuel to bunkering hubs.
- Cost claim: about USD 750 a tonne against a global USD 1,300.
Potential for India
- Positions Indian ports as green bunkering hubs on the Asia-Europe corridor.
- Creates demand for the National Green Hydrogen Mission.
- Supports Maritime India Vision 2030 and a larger Indian merchant fleet.
- Jobs: over 3,500 direct and indirect.
Limitations
- Scale: about 55,000 tonnes a year against an estimated 540 million tonnes a year of green methanol needed to replace all marine fuel.
- Carbon source: fossil-derived CO2 only delays emissions; biogenic supply must be assured.
- Cost of green hydrogen and round-the-clock renewable power.
- Demand risk: shipowners need methanol-ready engines and long-term offtake.
- Standards: certification of green fuels and lifecycle accounting.
Way forward
- Long-term offtake contracts with shipping lines.
- Green shipping corridors with partner ports.
- Viability support and carbon pricing linked to IMO rules.
- Replicate at other major ports, as the Shipping Minister has suggested.
Kandla is a proof of concept. Scaling it will decide whether India becomes a green fuel supplier to world shipping.
The basics
Why this matters
Ships run mostly on heavy fossil fuels, and cleaning them up is one of the hardest parts of the climate challenge. India has begun building a plant at Kandla to make e-methanol, a green ship fuel, right at the port. For UPSC, the story links green hydrogen, port infrastructure, maritime policy and global climate governance through the International Maritime Organization. It also tests whether India can turn cheap renewable power into exportable green fuels.
How e-methanol is made
The process has three stages. Renewable electricity splits water into hydrogen and oxygen in an electrolyser, producing green hydrogen. Carbon dioxide is captured, ideally from biogenic sources such as fermentation or biomass processing. The hydrogen and CO2 then react over a catalyst to form methanol. If the CO2 came from recent plant matter, burning the fuel returns carbon that was only recently removed from the air.
- 1Renewable powerSolar or wind electricity runs an electrolyser
- 2Green hydrogenWater is split into hydrogen and oxygen
- 3Carbon captureBiogenic CO2 is collected
- 4SynthesisHydrogen and CO2 react over a catalyst to form methanol
- 5BunkeringFuel is supplied to ships at the port
The project in numbers
Deendayal Port Authority and Assam Petro-Chemicals Ltd are partners in a 76:24 ratio. The port contributes equity, 75 acres of land, desalinated water and green hydrogen. The plant is to be built in two phases by March 2027 and claims a production cost well below global rates. Officials expect over 3,500 direct and indirect jobs, and the Shipping Minister has presented it as a model to replicate at other major ports.
Why shipping likes methanol
Shipping has several green fuel options. Liquid hydrogen must be kept at around 20 kelvin and needs new infrastructure. Ammonia carries no carbon but is toxic and lacks port handling protocols. Methanol is a liquid at normal temperature and pressure, so it fits largely conventional tanks and bunkering practice, making it close to a drop-in fuel. That is why many shipping lines are ordering methanol-capable vessels as a first step.
- Liquid at ambient temperature and pressure
- Uses largely conventional tanks
- Bunkering with existing procedures
- Contains carbon, so CO2 source matters
- Must be stored near 20 kelvin
- Boil-off losses
- Needs new infrastructure
- No carbon in the fuel
A realistic view
At 150 tonnes a day the plant would make roughly 55,000 tonnes a year, tiny beside the over 540 million tonnes a year of green methanol that would be needed to replace all marine fuel. Its value lies in proving that port-based production works in India, building a supply chain and testing costs. It is best judged as a pilot for costs, technology and supply chains.
You now know
- India's first port-based e-methanol plant is coming up at Deendayal Port, Kandla, with Rs 2,300 crore investment.
- Capacity: 150 tonnes a day in two phases (50 TPD by January 2027, 100 TPD by March 2027).
- Partners: Deendayal Port Authority and Assam Petro-Chemicals Ltd in a 76:24 ratio.
- E-methanol is made from green hydrogen and captured CO2, using renewable power, water and biogenic CO2.
Go deeper
In one line: India is building its first plant at a port to make e-methanol, a green ship fuel, from renewable power, water and biogenic carbon dioxide.
Why it matters for UPSC
It connects GS3 themes of energy, ports and infrastructure, climate change and new technology. Expect questions on green hydrogen, maritime decarbonisation and the IMO.
The core idea
Green Hydrogen is made by splitting water using renewable electricity. Combine it with captured carbon dioxide and you get E-Methanol, a liquid fuel ships can use without cryogenic tanks. The International Maritime Organization wants international shipping to reach net-zero emissions by around 2050, so ports that can supply green fuel gain an edge. Making the fuel at Deendayal Port Kandla saves the cost of carrying it to where ships refuel.
Numbers and dates to remember
- Rs 2,300 crore; 150 tonnes a day
- Phase I: 50 TPD by January 2027 (Rs 1,200 crore)
- Phase II: 100 TPD by March 2027 (Rs 1,100 crore)
- DPA and APCL: 76:24
- Claimed cost USD 750 a tonne versus global USD 1,300
Where to go next
- Green Hydrogen: Hydrogen made with renewable electricity
- E-Methanol: A liquid green fuel for ships
- International Maritime Organization: The UN body that sets rules for shipping
- Deendayal Port Kandla: India's port on the Gulf of Kutch
Go deeper: the hard road to green shipping
Shipping is called a hard-to-abate sector because ships cross oceans for weeks and cannot easily run on batteries. That leaves liquid or gaseous fuels. The International Maritime Organization wants international shipping at net-zero emissions by around 2050 and lower carbon intensity by 2030, which pushes shipowners to choose a fuel pathway now.
E-Methanol is attractive because it is liquid and familiar. But its climate value depends on two inputs. The hydrogen must be Green Hydrogen, made with renewable electricity, and the carbon should be biogenic. If fossil CO2 is used, the carbon still came from underground, so the benefit is only a delay.
Location matters too. A large share of world bunkering happens at a few hubs, while much green methanol capacity is being built far from them. Producing fuel at Deendayal Port Kandla removes the transport leg and could make India a refuelling stop on the Asia-Europe route.
The limits are real. At about 55,000 tonnes a year, the plant meets a sliver of demand. Costs depend on cheap round-the-clock renewable power, and shipowners need methanol-capable engines and long-term contracts. Kandla is best seen as a pilot that tests costs, builds skills and gives India a foothold in a future global fuel market.
Where to go next
- Green Hydrogen: Hydrogen made with renewable electricity
- E-Methanol: A liquid green fuel for ships
- International Maritime Organization: The UN body that sets rules for shipping
- Deendayal Port Kandla: India's port on the Gulf of Kutch
Green Hydrogen
Hydrogen made with renewable electricity
In one line: Hydrogen gas made using clean electricity, so no carbon is released in making it.
How it is made
An electrolyser uses electricity to split water into hydrogen and oxygen. If the electricity comes from solar or wind power, the hydrogen is called green.
Other colours
Hydrogen made from natural gas without capturing carbon is called grey. Making it that way releases carbon dioxide.
Why it matters
Green hydrogen can replace fossil fuels in steel, fertilisers and heavy transport. India's National Green Hydrogen Mission, launched in 2023, aims to make India a major producer. At Kandla, green hydrogen is the key ingredient for making e-methanol.
Where to go next
- E-Methanol: A liquid green fuel for ships
- International Maritime Organization: The UN body that sets rules for shipping
E-Methanol
A liquid green fuel for ships
In one line: A liquid fuel made from green hydrogen and captured carbon dioxide.
How it works
Hydrogen and CO2 are combined with the help of a catalyst to form methanol, a simple alcohol. The 'e' stands for electricity, because renewable power is used to make the hydrogen.
Why ships like it
Methanol stays liquid at normal temperature and pressure, so ships can store it in ordinary tanks. Hydrogen, by contrast, must be kept extremely cold.
The catch
It only helps the climate if the carbon comes from recent biological sources, such as plants, and not from fossil fuels. Kandla plans to use biogenic CO2.
Where to go next
- Green Hydrogen: Hydrogen made with renewable electricity
- International Maritime Organization: The UN body that sets rules for shipping
International Maritime Organization
The UN body that sets rules for shipping
In one line: The United Nations agency that makes the rules for ships sailing between countries.
What it does
The International Maritime Organization, based in London, sets global standards for ship safety, security and pollution. Its MARPOL convention deals with pollution from ships, including oil and air emissions.
Climate goals
The IMO wants international shipping to cut its carbon intensity by 2030 and reach net-zero emissions by around 2050. Because ships sail between countries, their emissions do not fit neatly into any one nation's climate targets, so global rules are needed.
Link to this story
These goals are why ports like Kandla are preparing to supply green fuels such as e-methanol.
Where to go next
- Green Hydrogen: Hydrogen made with renewable electricity
- E-Methanol: A liquid green fuel for ships
Deendayal Port Kandla
India's port on the Gulf of Kutch
In one line: One of India's biggest ports, on the Gulf of Kutch in Gujarat.
About the port
Kandla port was built after Partition to replace the loss of Karachi port. It was renamed Deendayal Port and is run by the Deendayal Port Authority, one of India's major ports under the Union government.
What it handles
It handles large volumes of cargo such as petroleum products, fertilisers, grain and salt, and serves north and west India.
Link to this story
The port is now building India's first port-based e-methanol plant, aiming to supply green fuel to ships on the Asia-Europe trade route.
Where to go next
- Green Hydrogen: Hydrogen made with renewable electricity
- E-Methanol: A liquid green fuel for ships
Take the 27 September 2026 quiz: 30 Prelims-style questions with answers