The Ministry of Ports, Shipping and Waterways has announced India’s first port-based green methanol production facility at Deendayal Port Authority in Kandla, Gujarat. The project, which received its foundation stone laying on 26 September 2026, is a joint venture between Deendayal Port Authority and Assam Petro-Chemicals Limited. The facility will produce e-methanol, a cleaner alternative fuel that ships can use to reduce their carbon emissions.
Key facts
- Location: Deendayal Port Authority, Kandla, Gandhidham, Gujarat
- Total capacity: 150 tonnes per day at full scale
- Total investment: Rs 2,300 crore
- Production cost: US$750 per tonne (compared to global rate of US$1,300 per tonne)
- Phase I: 50 tonnes per day capacity, Rs 1,200 crore investment, targeted completion January 2027
- Phase II: 100 tonnes per day additional capacity, Rs 1,100 crore investment, targeted completion March 2027
- Capital contribution: 76% from Deendayal Port Authority, 24% from Assam Petro-Chemicals
- Jobs created: Over 3,500 direct and indirect positions
- Land allocated: 75 acres from port authority
What is e-methanol and why it matters
E-methanol is a synthetic fuel produced using renewable power, water and biogenic carbon dioxide. Unlike traditional marine fuel, it significantly reduces the greenhouse gas emissions from ships. The facility will supply this green fuel to vessels travelling on the Asia-Europe International Trade Corridor, one of the world’s busiest shipping routes.
The manufacturing cost at Kandla will be substantially lower than global competitors, making Indian-produced e-methanol more attractive to international shipping companies. This cost advantage stems from India’s abundant renewable energy resources and the port’s strategic location on major shipping routes.
How the project will be built and run
Deendayal Port Authority will contribute equity capital of Rs 567.32 crore, provide 75 acres of land, supply desalinated water, and source renewable energy in the form of green hydrogen. Assam Petro-Chemicals, based in Namrup in Assam, will bring its petrochemical expertise to the partnership.
The plant will be constructed in two phases. Phase I, targeting January 2027, will establish 50 tonnes per day production capacity. Phase II, by March 2027, will scale this to the full 150 tonnes per day. This phased approach allows the facility to begin operations and supply fuel to ships while continuing expansion work.
Connection to India’s climate and maritime goals
The facility supports India’s commitment to achieve net zero emissions by 2070. It aligns with the government’s broader maritime expansion strategy, which includes plans to add 100 new ships to India’s merchant fleet over five years and position the country among the world’s top five ship-owning nations by 2047.
The project also demonstrates India’s move toward energy self-reliance and the “Make in India, Make for the World” initiative. By producing green fuel domestically and exporting it for global shipping, India positions itself as a supplier of clean energy solutions rather than just a consumer of energy imports.
Economic and employment impact
The Rs 2,300 crore investment will generate more than 3,500 direct and indirect jobs in the Kandla region. Beyond the plant itself, the project is expected to stimulate a complete green energy value chain in the area, including transportation, storage, supply infrastructure and associated manufacturing activities.
The facility will also support related port development. Deendayal Port Authority is simultaneously developing a shipbuilding project with Cochin Shipyard Limited valued at Rs 1,520 crore at Vadinar, and has received approval for a proposed greenfield shipbuilding and repair cluster at Kuchhadi in Porbandar.
What this means for you
For shipping companies operating on major international routes, access to competitively priced green methanol from an Indian port will lower compliance costs as global maritime regulations increasingly mandate lower-emission fuels. For employment seekers in Gujarat and nearby regions, the project creates skilled job opportunities across production, logistics and supporting services. For India’s economy, the facility reinforces the country’s position in global green energy markets and supports the transition toward cleaner shipping worldwide.