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PROBLEMS & ISSUES TO BE ADDRESSED

This source is practically unused in India for production of value added chemicals. About 20%
of our liquid fuel needs could be met through local production of small scale bio methanol plant.
As such it may not look economically very attractive to convert this waste to methanol/DME.
However, considering the dual benefits of totally carbon neutral or even carbon negative liquid
fuel production and smart management of mounting bio waste being generated in the country,
such projects could be commercially viable with some push from the State.
5.6 Production & Distribution Cost of Methanol & DME

In the previous section, the production cost of methanol for different feedstocks has been
mentioned. The production cost of DME could be different depending upon the production
scheme. The conventional route for dehydration of methanol either in standalone facility or
located in the existing methanol plant, will be similar. This cost is easier to estimate depending
upon the capacity and the technology. Not much information is available on the dehydration
plant but it could be extrapolated from similar dehydration plants in chemical industry. The
other route is the direct production of DME from syngas. From most of the limited available
information it seems that the investment cost for direct DME production is similar to equivalent
capacity methanol plant. Due to the uncertainty of future of DME and surplus methanol
availability in the world there are not many direct DME plants excepting few in China, Japan or
Korea. In several countries the preferred option is to have a mega complex for production of
fertilizer, methanol and power to neutralize the market forces for the changing prices of these
products.
In India the situation is quite different. There is shortage for power as well as methanol and
the fluctuation of power tariff in India is controlled, hence dedicated methanol or DME plants
could be considered. The choice is between dedicated methanol plant and dehydration plant
for DME or only dedicated DME plant has to be made depending upon the national strategy of
introduction of DME in the country.
Regarding distribution and transportation of methanol and DME there is no special issue since
methanol can be transported as blend with gasoline to the fuel delivery point and DME could
be handled in similar fashion as LPG. Only for substitution of diesel, the diesel engine fuel
handling system has to be modified but the delivery of neat DME to the fuelling station will
be similar to the LPG handling infrastructure. No significant additional cost in distribution is
envisaged.
Unlike large scale liquid fuel production facilities (refineries or methanol plants) where the
products will have to be transported to the user point which sometimes quite cost intensive,
the bio methanol or DME offers a significant advantage since it could be produced in smaller
scale, close to the user, thereby reducing the cost of transportation.

5.7 Retrofitting Old Equipment to Process New Fuel

The question of retrofitting old equipment to process new fuels is rather difficult in India. All the
methanol units in India are natural gas or naphtha based and chemical is produced via steam
reforming. The only possibility is to co-process available biogas or off gases from refinery or
steel plants to reduce the usage of natural gas. As indicated earlier there are also not many coal
based fertilizer plants in India. The power plants typically are air fired. As such these plants are
not very much suitable for methanol production. Also with the shortage of fertilizer production
capacity in India, the scope of utilizing the spare gasifier for methanol/DME production is also
limited. It may be worthwhile to consider some of the proposed coal based power plants to use
oxygen fired gasifier and part of the syngas is diverted towards methanol /DME production
system. This will not only generate low cost DME but also make these plants capture ready,
which may justify the additional cost.

Methanol and DME Production: Survey and Roadmap | 2017 85