India’s first port-based e-methanol plant planned at Kandla with Rs 2,300 crore investment

India is set to develop its first port-based e-methanol production facility at Deendayal Port Authority (DPA) in Kandla, Gujarat, with a total investment of Rs 2,300 crore.

The foundation stone for the project was laid at the DPA Exhibition Ground in Gandhidham by Gujarat Chief Minister Bhupendra Patel, Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal and Assam Chief Minister Dr Himanta Biswa Sarma.

The facility will have a planned production capacity of 150 tonnes of e-methanol per day. It will use renewable power, water and biogenic carbon dioxide (CO2) to produce e-methanol for maritime applications. The fuel is intended to supply vessels operating on the Asia-Europe International Trade Corridor.

According to the government, the project is expected to produce green methanol at approximately US$750 per tonne, compared with a global price of around US$1,300 per tonne.

Project to be developed in two phases

The e-methanol plant is being developed jointly by DPA and Assam Petro-Chemicals Ltd (APCL), based in Namrup, Assam. The facility will be built through scalable modules in two phases.

The first phase will add 50 tonnes per day of production capacity at an investment of Rs 1,200 crore and is targeted for completion by January 2027. The second phase will add a further 100 tonnes per day at an investment of Rs 1,100 crore, with completion scheduled for March 2027.

DPA and APCL will hold capital contributions in a 76:24 ratio. DPA’s contribution includes Rs 567.32 crore in equity capital, 75 acres of land, desalinated water and renewable energy in the form of green hydrogen.

The project is expected to generate more than 3,500 direct and indirect jobs and support associated activities such as transportation, storage and fuel supply around Kandla.

Kandla positioned for green maritime fuel supply

The project is being developed as part of India’s wider efforts to expand alternative fuel production and reduce emissions from maritime transport. The government has also linked the initiative to India’s target of achieving net-zero emissions by 2070 and reducing dependence on imported energy.

Patel said the project would make use of Gujarat’s renewable energy resources and coastline to supply green fuel to international shipping.

“Kutch and the long coastline of Gujarat will now power the world’s ships through Kandla,” he said.

Sonowal said the facility would support India’s transition from being a participant in international trade to becoming a supplier of fuels used in global shipping. He said Kandla could develop into a green-fuel hub on the Singapore-Rotterdam route and that the project could provide a model for other major ports.

Sarma highlighted APCL’s role in connecting Assam’s industrial base with the maritime energy transition. “Today, an Assam company carries that strength from Namrup to Kandla, proving that the Northeast will power India’s clean energy future,” he said.

Other maritime projects in Gujarat

The e-methanol project forms part of a wider pipeline of maritime infrastructure initiatives being pursued in Gujarat.

DPA is working with Cochin Shipyard Limited on a Rs 1,520 crore shipbuilding project at Vadinar. A proposed greenfield shipbuilding and ship-repair cluster at Kuchhadi in Porbandar has also received in-principle approval.

The government has separately set a target of adding 100 ships to India’s merchant fleet over the next five years, with a longer-term objective of positioning India among the world’s five largest ship-owning nations by 2047.

The foundation ceremony was also attended by Kutch MP Vinod Chavda, Gandhidham MLA Maltiben Kishor Maheshwari, APCL Chairman Bikul Deka, Vice Chairman Hemanta Gogoi and DPA Chairman Sushil Kumar Singh.