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Coal-based methanol development key to India's energy future, says official

New Delhi — Domestic coal-based methanol production is a key factor in India's drive for petrochemical and energy self-sufficiency, a methanol industry official told a conference in New Delhi Wednesday.

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Demand for domestically-sourced feedstock for petrochemicals production was a major driver of India's coal-based methanol sector development, National Institution for Transforming India or NITI Aayog methanol group chairman V.K. Sarawat told the India Methanol Economy International Seminar in New Delhi Wednesday.

"Methanol-to-olefins and methanol-to-propylene is demand that is anticipated to become a higher growth sector in the future; this demand has risen from 6% from 2011 to 12% in 2016," he said.

India's polyethylene deficit is expected to increase to 3 million mt by 2020 from 2 million mt in 2016 and its 1 million mt/year polypropylene surplus to flip to a slight deficit over the same period, according to data from S&P Global Platts Petrochemical Analytics.

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Reducing the environmental impact while increasing energy security in the transport sector was another key reason for ramping up domestic coal for methanol production, he said.

"It is important that we look at [a fuel] which is going to be less polluting and in turn can also be produced from the abundant [coal] reserve India has," Sarawat said.

Methanol is widely used as a transport fuel in the US and in China, where 15-20% of vehicles use methanol directly or as a mix, he added. Up to a third of global methanol demand is from the transport sector; 13% of global methanol requirements are for gasoline blending, 9% goes into MTBE, 9% into DME and 3% into biodiesel in 2015, according to global energy consultant Nexant. Sarawat said enhancing India's energy security required a two-pronged approach: "The creation of a comprehensive roadmap to set up the processes and technologies and a small-scale demonstration project for the conversion of high ash content coal into methanol," he said.

India's low quality, high ash content coal is a challenge that needs to be addressed before India's transition to a methanol-based economy can be realized, he added.

--Yi-Jeng Huang, yi.jeng.huang@spglobal.com
--Edited by Wendy Wells, wendy.wells@spglobal.com