A new report highlights how blending dimethyl ether (DME) produced from coal gasification with LPG can significantly reduce India's reliance on LPG imports and save billions in foreign exchange.
The blending of 20 per cent dimethyl ether (DME) --produced from coal gasification -- with LPG could reduce LPG imports by about 6.3 million tonnes annually, leading to a saving of forex of up to USD 4.04 billion (around Rs 34,200 crore) per year, according to a latest report.
Coal gasification converts coal into syngas, which is then transformed into DME's clean-burning fuel that serves as a homegrown substitute for imported LPG.
The report assumes significance in the wake of India facing Liquefied Petroleum Gas (LPG) supply constraints since the war broke out in West Asia.
According to the report titled 'Coal gasification for energy and chemical security' by EY-Parthenon and New Era Cleantech Solution Ltd -- a domestic coal gasification firm -- "DME, producible from coal gasification, can partially substitute LPG imports".
It further said 20 per cent blending could displace approximately 6.3 million tonnes of LPG imports annually.
The Bureau of Indian Standards (BIS) has already notified standards permitting up to 20 per cent DMG-LPG blending in India.
The report further said DME is emerging as a clean fuel alternative, particularly for LPG blending. India currently has limited pilot-scale domestic DME production.
Balasaheb Darade, MD, New Era Cleantech, said, "A clear blending policy will be key to unlocking investments and scaling domestic DME production."
DME can be produced from coal gasification, natural gas reforming, biomass gasification or waste-derived syngas through two major production pathways: the indirect route (syngas to methnol to DME) and the direct route (syngas to DME via single reactor catalytic process).
Countries with large coal reserves can therefore produce DME domestically through coal gasification technologies.
DME combustion produces significantly lower emissions compared with conventional hydrocarbon fuels.
China accounts for nearly 90 per cent of global DME production capacity, primarily due to its large scale coal-to-chemicals industry.
Global DME production is dominated by coal-based routes, which account for overwhelming majority of output. A much smaller shares come from natural gas or methane based pathways, while bio DME contributes only a minimal fraction.