The case for building India’s coal chemistry capability, Pg6

Key Highlights:

• India demonstrated significant energy resilience during a 2026 disruption in the Strait of Hormuz, primarily through the flexibility of its refinery sector.
• The crisis underscored the strategic importance of reducing dependence on imported energy resources, with coal chemistry emerging as a key opportunity.
• Dimethyl ether (DME), produced through coal gasification, has been identified as a clean-burning substitute for LPG.
• The Bureau of Indian Standards has approved blending up to 20% DME with LPG for various applications.
• The Union Cabinet has approved a ₹37,500 crore scheme to promote surface coal and lignite gasification, aiming to gasify 100 million tonnes of coal annually by 2030.

DME.png

Detailed Insights:

• India's refining sector developed the capability to process diverse crude oil types through sustained investments in indigenous research, metallurgical advances, and workforce training.
• During the Strait of Hormuz disruption, India rapidly increased non-Hormuz crude sourcing from 55% to 70% of its total intake within weeks.
• Domestic LPG production saw a rapid increase from 35 Thousand Metric Tonnes (TMT) to 54 TMT per day within five days by optimizing refinery operations.
• DME is chemically similar to LPG, allowing it to be blended directly into existing cylinders and pipelines without requiring new distribution infrastructure.
• A 20% DME blend derived from coal gasification could displace approximately 6.3 million tonnes of LPG imports annually, potentially saving around ₹34,000 crore in foreign exchange.
• CSIR’s National Chemical Laboratory developed an indigenous technology for converting methanol into DME, which the Centre for High Technology under the Ministry of Petroleum and Natural Gas is scaling up.
• The ₹37,500 crore scheme offers financial incentives covering up to 20% of plant and machinery costs and extends coal linkage tenure to 30 years to encourage investment.
• A challenge for India is its coal's higher ash content compared to the cleaner coal used in China's established coal-to-chemicals industry.

Key Concepts Involved:

• Strait of Hormuz: A narrow, strategically vital waterway connecting the Persian Gulf to the Arabian Sea, crucial for global oil and gas shipments.
• Coal Gasification: A process that converts coal into syngas (a mixture of hydrogen, carbon monoxide, and carbon dioxide) under high temperature and pressure.
• Syngas: A fuel gas mixture, primarily composed of hydrogen and carbon monoxide, produced from various feedstocks like coal, used in chemical synthesis.
• Dimethyl ether (DME): A clean-burning synthetic fuel, chemically similar to LPG, that can be produced from syngas and blended with LPG.
• Bureau of Indian Standards (BIS): India's national standards body responsible for developing and promoting standards for various products and services.