Kandla Begins Development of India’s First Port-Based E-Methanol Facility

A port-based plant for e-methanol production in the port of Kandla in the state of Gujarat, India, is under consideration as one of the initiatives for cleaner fuel for ships. This project is being implemented through cooperation of Deendayal Port Authority (DPA) and Assam Petro-Chemicals Ltd (APCL). This plant is going to have a production capacity of 150 tonnes per day (TPD).

This project is connected with the creation of an integrated eco-system of green fuels in Kandla. E-methanol may be used as an alternative marine fuel for international shipping.

₹2,300 Crore Project to Be Constructed in Two Stages

The construction of the project will be done in two stages based on the information available in the attached project report.

• Location: Kandla, Gujarat
• Port: Deendayal Port Authority
• Project Partners: DPA and Assam Petro-Chemicals Ltd
• Total planned capacity: 150 TPD
• Total project investment: ₹2,300 crore
• Phase I: 50 TPD
• Phase II: Additional 100 TPD
• Ratio of investment between: DPA & APCL 76:24

It was announced by the government in the month of January 2026 that there would be an investment of over ₹1,200 crore for 150-TPD project and that it could create over 3,500 jobs directly or indirectly. DPA will provide port-side infrastructure like pipeline connectivity and fuel handling facility and APCL will set up the production unit.

What is E-Methanol?

E-methanol, or electro-methanol, is manufactured through the use of green hydrogen and CO2 captured from the atmosphere, with renewable electricity powering the entire production process. The fuel is under consideration as a potential alternative for industries where electrification may prove to be more difficult, such as shipping, industrial operations, and chemicals manufacturing.

When applied in the maritime sector, e-methanol can power suitable dual-fuel ships. Thus, its development is associated with the transition to cleaner shipping fuels worldwide.

Kandla Begins Methanol Bunkering

The development of methanol-bunkering infrastructure in Kandla supports the e-methanol production process.

The Deendayal Port Authority carried out a shore-to-ship methanol-bunkering demonstration at Kandla in April 2026. It involved assessing the procedure and safety involved in transferring fuel. DNV Maritime Advisory Services evaluated the infrastructure of the port and gave the Kandla Port a readiness level of 6 on the IAPH methanol bunkering level scale.

The availability of approximately 500 KTPA of RFNBO-compatible e-methanol at Kandla in 2028–29 is expected to support deep-sea dual-fuel vessels plying the Asia-Europe trade lane.

Green Shipping and Asia-Europe Corridor

Given the strategic positioning of Kandla in terms of its geography within western India, it will have direct relevance to international maritime trade. This is because the proposed e-methanol ecosystem would enable ships using green fuel to traverse international shipping lanes.

In addition, the government has designated Deendayal Port as one of the ports that are being developed as part of a Green Hydrogen Hub as per the National Green Hydrogen Mission. The port has a 1 MW electrolysis-based green hydrogen plant and has allocated land for green hydrogen and green ammonia projects.

Role of Deendayal Port Authority

Deendayal Port Authority was a subsidiary of Kandla Port and is one of the largest ports in the country under the administration of the Ministry of Ports, Shipping and Waterways.

It is strategically located in the Kutch district of the state of Gujarat and has been playing a crucial role in the country’s western seaport operations. According to industrial sources, the port handled 160.11 million tonnes of cargo in FY 2025–26, making it the most productive Indian major port in FY 2025-26.

The present cargo handling, storage capacity, and future alternative fuel technology can serve as a base for Green Marine operations.

Assam-Gujarat Partnership

This is an example of collaboration between Assam and Gujarat within the field of clean energy. APCL uses its expertise in chemicals and industries from Assam, whereas DPA gets access to ports and global sea trade from Gujarat.

The collaboration showcases how production capacities in one state can be combined with renewable energy in another.