20% DME-LPG blend can cut imports by 6.3 MT, save around `34,200 cr yearly

New Delhi

The blending of 20% 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 $4.04 billion (around ₹34,200 crore) per year, according to a latest report released on Sunday.

Coal gasification converts coal into syngas, which is then transformed into DME, a 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, 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% 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% DME-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."