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Executive Summary
The present survey report is on the Utilization of Methanol & Dimethyl Ether (DME). DME is a downstream product of Methanol. Methanol drew the World’s attention towards it following the oil crisis in 1970 and subsequent years, when the crude oil price shot up to $100 per Barrel. Countries started looking for alternative fuels like Methanol, Ethanol and Bio-diesel to chalk out their energy strategy. India has limited oil & gas reserves and 80% of the energy needs are being met by imports. India is presently importing 202 MT of crude oil and 16 MT of Natural Gas with a big foreign exchange outgo. With better standard of living and purchasing power, the Automobile industry is enjoying a 9% growth rate with consequent increase in demand for gasoline. Government is looking for a solution to cut import bill and at the same time keep the economic development sustained. The advantage of methanol is that alternative raw materials are available for it in the country in the form of coal, bio-mass and municipal solid wastes. The technology is mature; however it is desirable to examine global experience in the utilization of Methanol & DME.
RESOURCE STATUS
India has proven oil reserves of 5.7 billion barrels, gas reserves of 1.4 trillion cubic meters and coal reserves of 125 billion tonnes. As per IBEF analysis the energy demand of India will double from 775 mtoe in 2013 to 1440 mtoe by 2030. INDIAN STATUS There are six major producers of methanol in India with a total installed capacity of 0.66 MTPA. Imports constitute around 70% of total consumption. In 2014 – 15 the production was 0.2098 MT (30% capacity utilization) & imports was 1.8019 MT. DME is not currently manufactured in the organized sector in India. In India, formaldehyde, acetic Acid and pharmaceuticals (bulk drugs & intermediates) are the three important end-use segments, which together account for 55% of the total methanol consumed in the country.
GLOBAL STATUS
There are more than 100 plants operating worldwide which produce 110 MT of Methanol annually. China, Saudi Arabia, Trinidad and Tobago, Iran and Russia are the top five methanol producing countries in the world. Global methanol demand is around 62-65 MT excluding integrated methanol to olefins demand. Methanol is an important feedstock for chemical Industry. Globally, natural gas is the most popular feedstock for methanol due to reasonable cost and good operational factors. China derives its methanol mainly from coal. Methanol is also utilised as transportation fuel, both in-land and marine sector as well as in fuel cells especially for remote use as in military applications. It has been tested as boiler fuel in Israel. Globally, 60% of methanol is consumed in traditional chemical sectors (acetic acid, formaldehyde, while 40% is consumed in energy related applications (biodiesel, MTO, fuel blending, DME & MTBE). The global methanol installed capacity is 105 MT per annum, while production is between 80 to 100 MT
METHANOL & DME UTILIZATION
Traditionally, Methanol is utilized as a raw material for production of formaldehyde, acetic acid & acetic anhydride etc. Methanol use in the transportation sector as a blended fuel is established since 1980. DME has shown encouraging results when utilized as a blend for diesel substitution as well as with LPG for domestic fuel purpose.
FORMALDEHYDE
Presently in India, there are about 25 formaldehyde plants having total installed capacity of about 413,000 tonnes per annum with production of 275,000 tonnes. The global consumption of formaldehyde in 2014 has been reported to be around 20.5 MT. ACETIC ACID Gujarat Narmada Valley Fertilizers Corporation (GNFC) is the only unit producing acetic acid. In 2014, India produced 159.61 thousand tonnes of acetic acid and imported 712.38 thousand tonnes. The global acetic acid market was estimated 12.9 MT in 2014 with following utilization break-up: VAM 32%, PTA 20%, Acetic Anhydride 13%, Ethyl & Butyl Acetate 20%. MTO (METHANOL TO OLEFINS) Methanol is used as a feedstock for the production of polyethylene and propylene. This process is confined to China only at present (2016).
METHANOL AS TRANSPORTATION FUEL
Methanol was introduced commercially in the 1980s following crude price variations in 1970. In 1990s, several car manufacturers came out with flexible fuel vehicles which could run with M15 blends. Compared to gasoline, methanol emits less nitrogen oxides, zero sulfur emissions and lesser volatile harmful organic compounds that form smog or ozone when burned as fuel. Lower level methanol-blends (M5, M10, and M15) can be directly used in most existing vehicles with little to no modification, as industry experience confirms. BIO-DIESEL In the process of making biodiesel fuel, methanol is used as a key component in a process called transesterification. Currently, India has 5-6 large capacity plants (10,000 to 250,000 MT per year) currently utilizing 28 percent of the installed capacity to produce 125-140 million liters of biodiesel from multiple feed-stocks such as inedible vegetable oils, unusable edible oil waste (used-once) and others.
METHANOL AS MARINE FUEL
According to Methanol Institute, globally there are an estimated 90,000 marine vessels with a consumption of 370 MT of bunker fuel. The use of methanol/methanol-diesel dual-fuel system has been found to be cost effective, competitive and environment friendly. Methanol’s use in marine application is mainly due to MARPOL sulfur emissions restrictions.
TECHNOLOGY
Methanol ships have been powered by diesel concept engines which have been modified to run on both methanol and marine diesel. Sweden’s Stena Line launched the world’s first methanol-fuelled ferry in March 2015. Seven 50,000 dead weight tonnes vessels based on MAN B&W ME-LGI 2-stroke dual fuel engines that can run on methanol, fuel oil, marine diesel oil, or gas oil have also been commissioned in 2016. Dual fuel technology is used, with methanol as the main fuel, but with the option to use Marine Gas Oil (MGO) as backup.
FUEL CELL
Methanol fuel cells have been reported for use in forklifts in combination of normal batteries. These DMFC have reported to improve the working time, reduce operating costs and reduce GHG emissions by up to 66% (specific model: Oorja Model 3).
POLICY IN INDIA
India’s policy on fuel cells and financial support is driven largely by four agencies, viz. Ministry of New and Renewable Energy (MNRE), Department of Science and Technology (DST), Department of Atomic Energy (DAE) and Council of Scientific and Industrial Research (CSIR).
DIMETHYL ETHER (DME)
DME is being currently utilized as a cooking fuel in China. The possibility of using it as a transport fuel is being currently pursued in many countries. Due to DME’s physical and chemical properties, (it can be liquefied at low pressures, 5 bars), it has been established as a diesel substitute. The emission – related benefits of DME as shown by Volvo Trucks certainly point to zero particulates, lower NOx and 10% lower CO2 emissions but with equivalent fuel efficiency against a diesel engine.
ENVIRONMENT & SAFETY
Methanol is not a persistent chemical and is broken down in the environment. Methanol fires can be easily managed by alcohol-resistant foam. The IDLH of methanol has been reported by NIOSH as 6000 ppm. Various toxicity studies has confirmed that exposure up to 6000 ppm of methanol vapours in animals (Monkeys & Rats) didn’t result in any exposure related adverse effects. Human toxicity values in terms of half-lives methanol in body are roughly 2.5 to 3 hours at doses less than 100 mg/kg bw. Methanol’s GHG emissions are 7.6% less than diesel and 5.3% less than Ethanol. The Indian standard, IS7444 (1974) provide storage guidelines for methanol, both for small and large storage facilities including packaging and labeling. There are no Indian standards for DME. The storage, handling, distribution and safety aspects of DME are very similar to those of LPG. JIS standard K2180, ISO 16861:2015 and ASTM D7901 - 14b are relevant standards for DME.
OBSERVATIONS
Presently many European countries have allowed blending methanol with gasoline upto 3% of methanol with no concerns on environmental and technological issues. Similarly, DME has also been researched for use in trucks & cars (which are running on diesel fuel) with change in fuel system and additives. If Government changes fuel policy & allows 3% to 5% Methanol blending with gasoline in place of Ethanol then it will ease pressure on alcohol based industry. For DME, as per Government’s desire to supply LPG cylinder to poor people, the new demand for LPG can be met by blending 5% to 9% of DME with LPG. The present domestic demand is 16 MT. The requirement of DME at 7% - 9% blending will be about 1 to 2 MT.
UTILIZATION OF COAL
India has good reserves of Coal in the country. It is observed that India’s coal reserves are spread mainly in seven states. The non-coking varieties are spread over Chhattisgarh, Jharkhand, Orissa and West Bengal. It may be an appropriate opportunity for these states to make an effort to establish coal based chemical industry starting with methanol along with DME and other basic chemicals. This will give a much needed impetus for utilization of methanol and DME in India.
DEMAND PROJECTION
The present demand of methanol in the country is limited to traditional chemicals like formaldehyde, acetic acid and in pharmaceuticals sector. The present consumption is of the order of 1.8 MT. It is observed that the demand in the sector is growing at the rate of 6% per annum. It is estimated that the demand will grow to 3.0 MT by 2025. The automobile industry in the country is growing at the rate of 9% (excluding two and three wheelers, SIAM) and alongside gasoline demand. It is observed throughout the world that many countries are planning to blend methanol at 5% per litre. With blend of 5% methanol and 5% ethanol as co-solvent, India will be in comfortable position. The demand of gasoline presently is 23 MTPA with 11% growth rate. The methanol demand for fuel blending would be 2.0MT by 2025. India with 1.33 billion people consumes 20 MT of oil. The used cooking oil and other inedible oil and animal tallow can be utilised for biodiesel production. Government in the last 15 months (2014-2016) gave more than 40 million LPG connections to rural poor people. Presently, the demand of LPG is 21 MT. With additional connections, the demand of DME could be more than 2.5 MT requiring 3.0 MT of methanol. The domestic demand of methanol by 2025 will be about 10.50 MT along with the demand for DME as a blend for LPG requiring 3.00 MMT
Published by TIFAC : February, 2018
Price Rs. 30,000
