The government is promoting coal gasification to convert high ash coal into methanol that can be used as cooking gas, with an aim to cut down dependence on West Asian countries for LPG imports, Niti Aayog member V K Saraswat said.
He said that the world's largest coal miner, Coal India Ltd (CIL), is likely to set up a coal-based methanol plant in West Bengal.
"There is excessive ash content at several coal mines in states like West Bengal, Odisha and Jharkhand, which are not in much demand amongst the coal-based power plants. Coal with high ash content can be converted into methanol and can be used for cooking gas purpose as methanol is substitute for LPG," Saraswat said.
Niti Aayog is government's premier think-tank and the prime minister is its chairman.
"We import 60 per cent of our LPG needs and we can save billions of dollars by converting high ash coal into methanol and use it for cooking gas purpose," he added.
Saraswat, the former Defence Research and Development Organisation (DRDO) chief said, "We are requesting industries to start setting up coal-based ethanol manufacturing plant."
Saraswat, who is also chairman of Methanol Committee, is in talks with companies like NTPC and Oil India to encourage methanol economy.
Recently, Coal Secretary Susheel Kumar had also said that India's dependence on petroleum and natural gas can be brought down or done away with if the country manages to extract gas from coal.
According to latest data, India imports almost a million tonnes of LPG every month to meet rising demand that has been further fuelled by the government drive to give free gas connections to poor women.
LPG consumption in 2016-17 rose 9.8 per cent to 21.55 million tonnes. Of this, 11 MT were imported.
India mainly imports LPG via term contracts from major Middle Eastern producers like Saudi Aramco, Qatar's Tasweeq, Abu Dhabi National Oil Co and Kuwait Petroleum Corp.
Experts believe that India's LPG imports will rise over the next three years to 16-17 MT as the government pushes for making available cooking gas cylinders to the poor and wean them away from polluting fuels.
Last year, Saraswat had said that the methanol economy promises to help India mitigate its petroleum import costs and at the same time counter problems associated with global warming.
"India is in the cusp of a gigantic transformation towards a developed nation. The country can use its abundant coal reserves to produce methanol through gasification. Abundant non-edible biomass can also be gasified to produce methanol," Saraswat had said.
According to the latest estimate, methanol production could cut India's huge crude oil imports bill, which is pegged at Rs 6 lakh crore per annum.
Methanol is a clear and colourless liquid produced from natural gas, coal and wide range of renewable feedstocks. Also known as wood alcohol, methanol is naturally occurring and biodegradable.
India has already introduced blending of petrol with ethanol.
According to the Methanol Institute, USA -- an industry consortium -- China is using 15-20 per cent of its fuel mixed with methanol.
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