ACME signs green methanol supply deal with Mitsubishi Gas Chemical

ACME Green Molecules on Friday signed a binding long-term purchase and sale agreement with Mitsubishi Gas Chemical Company, Inc. to supply 100,000 tonnes of green methanol annually.

The company estimates an investment of about $1 billion to meet the committed volumes, it said in a statement.

The ACME Group company will supply the green fuel from its 200,000 tonne per annum green methanol plant being developed in Paradip, Odisha.

Green methanol is gaining traction as a commercially viable substitute for heavy fuel oil (HFO), very low sulphur fuel oil (VLSFO) and marine gas oil (MGO) because of its lower carbon dioxide emissions. It also functions as a liquid fuel compatible with existing ship and port infrastructure, requiring only modest modifications to current systems.

"This agreement marks an important milestone in ACME Group's journey to build a globally competitive green methanol business and accelerate the transition to sustainable fuels and chemicals in marine and aviation sectors. We are proud to partner with MGC, a globally respected leader in the methanol industry, to advance the commercialization of green methanol at scale," Anil Taparia, chief executive officer of ACME Green Molecules Business, said in the statement.

"ACME Group has continuously created new frameworks in new business fields, is now trying to navigate through the challenge in green methanol field. We are honored to have concluded a long-term contract to purchase this green methanol and contribute to overcome those challenges," said Hideaki Akase, managing executive officer, green energy & chemicals business sector, Mitsubishi Gas Chemical.

Odisha project

ACME is developing the plant in partnership with Industrial Promotion and Investment Corporation of Odisha Ltd (IPICOL).

In January, Mint reported that ACME Group had signed an agreement to build a $1.4 billion (about ₹12,422 crore) green methanol plant in Odisha with an annual production capacity of 200,000 tonnes to fuel ships.

According to the company's statement on Friday, the agreement between ACME Green Molecules and Mitsubishi Gas Chemical is the first-ever renewable fuels of non-biological origin-compliant green marine fuel collaboration by an Indian company.

Renewable fuels of non-biological origin is a legal classification under European Union regulations that includes synthetic fuels such as green hydrogen and green methanol produced using renewable electricity.

Japan push

On Thursday, the Union ministry of new and renewable energy announced that, under the National Green Hydrogen Mission, ACME Group had secured long-term offtake agreements with leading Japanese companies—IHI Corporation for green ammonia and Mitsubishi Gas Chemical Company, Inc. (MGC) for green methanol.

On 30 June, ACME Group and Japan's IHI Corp. secured $3 billion in price support from the Japanese government for their green hydrogen joint venture in Odisha, enabling customers in Japan to buy green hydrogen at a cost comparable to grey hydrogen.

ACME's Gopalpur green hydrogen project, with an annual capacity of 405,000 tonnes, will supply green ammonia to IHI Corp., as well as other Japanese customers including Mitsubishi Gas Chemical Co., Hokkaido Electric Power Co., Nippon Beet Sugar Manufacturing Co., Kobelco Power Kobe Inc., Sumitomo Chemical Co. and UBE Corp.