Methanol economy
Also called: Methanol Economy Programme · Topic: Energy Resources of India: Conventional and Non-conventional · NCERT: Beyond NCERT
Meaning
The Methanol economy is a NITI Aayog programme. It aims to use methanol and its product DME (Dimethyl Ether) as fuels and as blends in other fuels. Methanol is a simple alcohol, and it is both a fuel and a basic raw material for chemicals. India can make it from its own coal through coal gasification, which turns coal into a gas called syngas (mostly carbon monoxide and hydrogen). The syngas is then turned into methanol. It can also be made from biomass (plant and farm waste). DME burns cleanly and can be mixed with LPG, which is cooking gas. The programme matters because it uses domestic coal in place of imported oil and gas. That supports energy security, which means having a safe and steady supply of energy.
Example
In 2026, NTPC Limited applied for a coal-to-methanol and DME project. It applied under the Ministry of Coal's ₹37,500 crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects. That scheme works toward India's target of 100 million tonnes of coal gasification by 2030.
Don't confuse with
- Ethanol blending: here ethanol, a different alcohol, is mixed into petrol under the National Policy on Biofuels (2018, amended 2022). Ethanol is made from molasses, cane juice, damaged grains and maize. Methanol is made mainly from coal through gasification.
- Coal-bed methane: this is natural gas taken straight out of coal seams. Methanol is a liquid fuel made in a factory from coal-derived gas.