India Begins Construction of First Port-Based E-Methanol Plant at Kandla
India has taken a major step towards developing cleaner maritime fuels with the foundation stone laid for the country’s first port-based e-methanol production facility at Deendayal Port Authority in Kandla, Gujarat. The ₹2,300-crore project, being developed jointly by Deendayal Port Authority (DPA) and Assam Petro-Chemicals Ltd. (APCL), will have a planned production capacity of 150 tonnes of e-methanol per day.
The facility is designed to supply green fuel to vessels operating on the Asia-Europe International Trade Corridor, connecting India’s clean-energy ambitions with one of the world’s major maritime trade routes. The project also brings together Gujarat’s port infrastructure and Assam’s industrial capabilities in a new green-energy partnership.
₹2,300-Crore Facility to Be Developed in Two Phases
The e-methanol plant will be constructed in two phases. The first phase involves an investment of ₹1,200 crore and will add 50 tonnes per day of production capacity, with completion targeted for January 2027. The second phase, involving a further ₹1,100 crore, will add another 100 tonnes per day and is targeted for completion by March 2027.
Once both phases are completed, the facility is expected to reach its full capacity of 150 tonnes per day. The project is also expected to create more than 3,500 direct and indirect employment opportunities, while generating demand for supporting activities such as transportation, storage and maritime fuel services.
Renewable Energy at the Core of Production
The Kandla facility will use renewable power, water and biogenic carbon dioxide (CO₂) to produce e-methanol. Unlike conventional methanol, e-methanol can be produced using renewable energy and sustainable carbon sources, making it an important option being explored for reducing emissions in sectors such as shipping.
The port-based design is particularly significant because production will be located close to the ships and maritime infrastructure that will use the fuel. This can help integrate production, storage and bunkering within the same broader port ecosystem.
Kandla Builds on Existing Green-Fuel Infrastructure
The new plant is being developed alongside Kandla’s existing efforts to establish itself as a hub for alternative marine fuels. In April 2026, Deendayal Port successfully conducted a shore-to-ship methanol bunkering trial, testing fuel-transfer procedures, safety systems and regulatory protocols. The port subsequently received Port Readiness Level 6 for methanol bunkering following an assessment by DNV Maritime Advisory Services.
Kandla is also working towards making around 500 KTPA of RFNBO-compliant e-methanol available by 2028-29, with the planned supply intended to support deep-sea dual-fuel vessels operating along the Asia-Europe trade corridor. The port has further indicated plans to advance towards ship-to-ship methanol bunkering.
Connecting Assam’s Industry with Gujarat’s Maritime Gateway
The project has an important inter-state dimension. Assam Petro-Chemicals Ltd., based in Namrup, Assam, is partnering with Deendayal Port Authority to establish the facility at Kandla. An MoU for the 150-tonne-per-day project was signed in January 2026, laying the foundation for the partnership.
The collaboration connects Assam’s petrochemical and industrial capabilities with Gujarat’s strategic position on India’s western coastline. It also reflects how different parts of the country can contribute to an emerging green-energy value chain, from production and processing to port infrastructure and international shipping.
Strengthening India’s Green Shipping Ecosystem
India’s maritime sector is increasingly preparing for the wider adoption of alternative fuels. Deendayal Port has already commissioned a 1 MW electrolyser-based green hydrogen plant and has allotted substantial land for green hydrogen and green ammonia projects. These developments provide a broader foundation for building an integrated clean-fuel ecosystem around the port.
For international shipping, the development of fuels such as e-methanol is becoming increasingly important as the industry works towards reducing greenhouse-gas emissions. A port that can produce, store and supply alternative fuels can potentially become an important part of emerging green shipping corridors.
A New Opportunity for Green Fuel Exports
According to the Ministry of Ports, Shipping and Waterways, the Kandla project is expected to produce green methanol at an estimated US$750 per tonne, compared with a cited international rate of around US$1,300 per tonne. Actual competitiveness will ultimately depend on production efficiency, renewable-energy costs, technology and international market conditions.
The project's location at a major maritime gateway also creates the possibility of supplying green fuel directly to international vessels. This could give India greater participation in the developing global market for alternative marine fuels while encouraging investment in related infrastructure and technologies.
The MGMM Outlook
The development of India’s first port-based e-methanol production facility at Kandla represents a significant step in building a cleaner and more advanced maritime-fuel ecosystem. With a planned investment of ₹2,300 crore and production capacity of 150 tonnes per day, the project brings renewable energy, sustainable carbon sources and port infrastructure together to serve the growing demand for alternative marine fuels. Its connection to the Asia-Europe trade corridor, along with Kandla’s existing methanol bunkering initiatives, strengthens the port’s potential role in emerging green shipping networks.
The partnership between Deendayal Port Authority and Assam Petro-Chemicals Ltd. also highlights the potential of inter-state industrial cooperation in developing new energy opportunities. By connecting Assam’s industrial capabilities with Gujarat’s maritime infrastructure, the project can contribute to employment, supporting industries and the wider green-fuel value chain. Alongside ongoing investments in green hydrogen, green ammonia and methanol bunkering, the Kandla initiative reflects the expanding scope of India’s clean-energy infrastructure and its efforts to participate in the future global market for sustainable maritime fuels.
(Sources: Business Standard, OpIndia, Economic Times)
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