India has launched its first port-based e-methanol facility at Deendayal Port, Kandla. This Rs 2,300 crore project, a joint effort with Assam Petro-Chemicals, aims to produce sustainable shipping fuel. It is part of a broader strategy to boost India’s green exports and support national Net Zero goals.
India has officially kicked off the construction of its first port-based e-methanol production plant located at Deendayal Port in Kandla, Gujarat. The project, valued at Rs 2,300 crore, represents a strategic partnership between the Deendayal Port Authority and Assam Petro-Chemicals Ltd. The facility is designed to produce sustainable fuel specifically for the global shipping industry, using a combination of renewable energy, water, and biogenic carbon dioxide. By focusing on e-methanol, the project aims to help the maritime sector lower its carbon emissions, a major priority for global shipping lines under new environmental mandates.
The project is planned in two specific phases to ensure operational efficiency. The first phase, requiring an investment of Rs 1,200 crore, targets an output of 50 tonnes per day by January 2027. This will be followed by a second phase in March 2027, adding another 100 tonnes per day at a cost of Rs 1,100 crore. The collaboration leverages the strengths of both partners: the Deendayal Port Authority provides the necessary land, desalinated water, and logistics infrastructure, while Assam Petro-Chemicals brings technical expertise in petrochemical manufacturing. The equity structure for the venture is set at a 76:24 ratio, with the port authority handling the bulk of the infrastructure investment.
The economics of this project hinge on producing green fuel at a competitive price. Projections suggest the facility aims to supply e-methanol at roughly $750 per tonne, which is significantly lower than the current global average cost of $1,300 per tonne. If achieved, this cost advantage could make Indian-produced green fuel attractive to international shipping companies looking to decarbonize their fleets. This effort is part of a larger plan to transform India into a hub on the critical trade route between Singapore and Rotterdam.
While the project aligns with India’s maritime goals, investors should remain aware of inherent risks. Large-scale green energy infrastructure projects often face risks regarding technical execution and cost overruns. Furthermore, the global market for green shipping fuels is still developing, meaning demand stability remains a key monitorable. The project's success will depend heavily on the availability and cost of renewable power and green hydrogen, which are essential inputs for e-methanol production. Additionally, any volatility in global shipping demand or changes in international green fuel standards could impact the project’s long-term profitability.
For the domestic industry, this project is part of a wider push that includes shipbuilding ventures at Vadinar and repair clusters at Porbandar, aimed at increasing the national merchant fleet. Investors and stakeholders should keep track of the January 2027 deadline for the first phase, as this will provide the first real data on the project's ability to meet production targets and manage operating costs at scale.