What is a ethylene oxide project report?
An ethylene oxide project report is a detailed project report (DPR) for a plant that oxidises ethylene over a silver catalyst to make ethylene oxide (EO). It sets out the process route, ethylene and oxygen supply, machinery, safety approvals, project cost, means of finance, five-year projections, DSCR and break-even that lenders and investors check.
Chemical companies use it to test a new EO line or a move into derivatives. Banks and boards use it to judge whether the plant can carry its debt.
Also known as: EO plant project report, project report on ethylene oxide, ethylene oxide business plan, oxirane plant feasibility report, DPR for ethylene oxide plant.
Ethylene oxide manufacturing plant cost in India
Our sample report models a compact unit of 8.8 MT per day, or 2,904 MT per year, working 330 days. It starts at 60% of capacity and reaches 80% in Year 5, selling EO at ₹1,09,000 per MT before GST.
Most EO capacity in India sits inside large petrochemical complexes that are many times this size. The sample shows how an NPCS report sets out the cost and returns; your own report is sized to your site and feed supply.
| Land and site development | 88.67 |
|---|---|
| Building and civil works | 327.72 |
| Plant and machinery | 589.95 |
| Other fixed assets | 64.01 |
| Contingencies | 45.88 |
| Preliminary and pre-operative | 27.91 |
| Working capital margin | 73.63 |
| Total | 1,217.77 |
| Promoter's contribution (25%) | 304.44 |
|---|---|
| Term loan from bank (75%) | 913.33 |
| Cash credit limit (separate) | 220.88 |
| Total project cost | 1,217.77 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. The lowest DSCR, 1.49, comes in Year 2. All figures are illustrative.
Ethylene oxide manufacturing process
Almost all EO is now made by direct oxidation of ethylene over a silver catalyst. Only a small part of the ethylene reacts on each pass, so the plant runs as a closed gas loop and most of the gas goes round again.
- Feed mixing
Fresh ethylene and oxygen are added to the recycle gas, with methane as ballast and a trace of chloride inhibitor. The mix is held outside its flammable range at all times.
- Catalytic oxidation
The gas flows through many long tubes packed with silver catalyst. Coolant boiling around the tubes takes away the reaction heat and raises steam for the plant.
- EO absorption
Gas leaving the reactor is washed with water, which takes up the EO. The washed gas is compressed and sent back to the reactor.
- Carbon dioxide removal
Part of the ethylene burns to carbon dioxide instead of forming EO. A side stream of recycle gas is treated to remove it so it does not build up in the loop.
- Stripping and purification
EO is stripped out of the rich water with steam and distilled to specification. The lean water returns to the absorber.
- Storage and dispatch
Pure EO is kept chilled under a nitrogen blanket in pressure vessels and filled into tankers or cylinders for derivative makers.
Which process route suits an EO plant?
The choice is less about the reactor and more about where the ethylene and oxygen come from. These are the routes a report compares.
| Oxygen-based direct oxidation | The usual choice for new plants. Pure oxygen keeps the vent stream small, so less ethylene is lost, but it needs an air separation unit or an oxygen supply over the fence. |
|---|---|
| Air-based direct oxidation | Found in older plants. It avoids buying oxygen but vents a large nitrogen stream that carries ethylene with it, so feed use per tonne of EO is higher. |
| Ethanol to ethylene front end | Ethanol is dehydrated to ethylene before oxidation. It frees the plant from a cracker pipeline and gives a bio-based EO, but the cost depends on ethanol prices. |
| Chlorohydrin route | The original process, using chlorine and lime. It produces large volumes of calcium chloride effluent and is no longer used for new EO capacity. |
| EO and glycol integration | Large plants convert most EO into mono ethylene glycol on site. A merchant unit sells EO itself or converts part of it into ethoxylates. |
| Basis of our sample | Oxygen-based oxidation with ethylene by pipeline, selling EO to derivative makers. |
Raw materials for ethylene oxide
Ethylene decides the economics. In our sample it is 86% of raw material cost and close to half of sales value. In theory 0.64 tonne of ethylene makes a tonne of EO; real use is higher because some ethylene burns to carbon dioxide, and catalyst selectivity sets how much.
Ethylene is a gas that is costly to move except by pipeline or as a refrigerated liquid. That is why EO units sit next to a cracker, an import terminal or an ethanol-to-ethylene unit.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Ethylene by pipeline | 86% | 1,055.65 |
| Oxygen | 9% | 110.48 |
| Silver catalyst replacement | 3% | 36.82 |
| Methane ballast and chloride inhibitor | 2% | 24.55 |
| Total | 100% | 1,227.50 |
Raw materials are 55.4% of sales in Year 3 of the sample. Your report uses contract prices for your feed source.
Machinery for an ethylene oxide plant
The oxidation reactor is the largest single item at ₹153.39 lakh, about a quarter of machinery cost. Safety systems, refrigerated storage and the flare are part of the core plant, not extras.
| Equipment | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Multitubular fixed bed oxidation reactor | Holds the silver catalyst; coolant removes the heat | 153.39 |
| Recycle gas compressor | Returns unreacted gas to the reactor | 82.59 |
| EO absorber and stripper columns | Wash EO out of the gas, then recover it | 82.59 |
| Carbon dioxide removal system | Stops the by-product building up in the loop | 58.99 |
| EO purification column | Distils EO to specification | 58.99 |
| Refrigerated pressurised EO storage bullets | Hold EO chilled under nitrogen | 53.10 |
| Distributed control and safety interlock system | Runs the loop and trips it on unsafe conditions | 41.30 |
| Oxygen mixing station | Adds oxygen to the loop under tight control | 29.50 |
| Flare and vent scrubber | Burns or captures vented gas | 29.50 |
| Total plant and machinery | 589.95 | |
Costs are the sample report's estimates. Get licensor and vendor quotations before you finalise.
Utilities and manpower for an EO plant
Power and fuel cost ₹130.60 lakh in Year 3 of the sample, or 5.9% of sales. The recycle compressor and refrigeration are the main power users. Steam raised by the reactor coolant covers much of the stripping duty, so cooling water and boiler feed water need careful sizing.
The plant runs round the clock, so operators work in shifts and the control room is never left empty.
| Category | Number | Monthly wage (₹) | Year 1 (₹ lakh) |
|---|---|---|---|
| Management, supervision and administration | 7 | 32,500 | 27.30 |
| Skilled workers and operators | 16 | 20,500 | 39.36 |
| Semi-skilled and unskilled workers | 24 | 13,500 | 38.88 |
| Total | 47 | 105.54 |
Licences and safety approvals for an ethylene oxide plant
EO is flammable, reactive and toxic, so approvals take longer than for most chemicals. These were checked against official sources in October 2026.
| Environmental clearance | Prior clearance under the EIA Notification, 2006. Basic organic chemicals fall under item 5(f): Category A outside a notified industrial area, Category B inside one. Check the amended schedule on PARIVESH. |
|---|---|
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board. Organic chemical and petrochemical manufacturing are in the Red category. |
| Hazardous chemical rules | EO is listed under the MSIHC Rules 1989. From 5 tonnes on site, duties such as site notification and emergency plans apply; from 50 tonnes, a safety report and audit are also needed. |
| Pressure storage licence | PESO licence in form LS-1A under the SMPV(U) Rules 2016, with prior approval of layout, safety distances and a HAZOP study for major installations. |
| Product standard | IS 5573:1984, the BIS specification for ethylene oxide, reaffirmed in 2023. Confirm with BIS whether certification is mandatory before you start. |
| Factory and fire | Factory licence from the state factories department and fire NOC for the site. |
Who buys ethylene oxide in India?
Most EO made in India never leaves the plant: it is converted on site into mono ethylene glycol for polyester. That leaves merchant EO for derivative makers in short supply, and these buyers are the market for a smaller unit.
- Surfactant and ethoxylate producers
- Ethanolamine and glycol ether makers
- Polyethylene glycol and specialty chemical makers
- Medical device sterilisation units
- Pharmaceutical intermediate makers
Location decides the project: EO travels poorly and ethylene travels worse. A merchant unit works only where it can take ethylene by pipeline and reach derivative buyers within a short tanker run.
Mistakes that weaken an ethylene oxide project report
- Assuming ethylene can be trucked in
Without a pipeline or a terminal next door, feed cost and supply risk rise sharply. The report must show a firm source and a supply contract.
- Borrowing glycol-integrated economics
Large plants spread cost over EO and glycol. A merchant unit must stand on EO sales alone, with freight and buyer credit included.
- Ignoring catalyst change-out
Silver catalyst loses selectivity with age and is replaced every few years. Leave it out and ethylene use per tonne looks too low.
- Treating safety as a later cost
PESO storage, flare, interlocks and emergency plans are needed before start-up. Adding them after the loan is sanctioned breaks the budget.
- Pricing EO from one good month
EO prices follow ethylene and swing widely. Lenders expect the spread between them, not the EO price alone, to be tested.
How NPCS helps with an ethylene oxide plant
- Site and feed studyCompare sites by ethylene and oxygen access, buyer distance and safety distances.
- Route and capacityWeigh oxygen-based, air-based and ethanol-based options, and merchant EO against derivatives.
- Bank-ready project reportProjections, DSCR, sensitivity to the ethylene to EO spread and working capital in lender format.
- Approvals roadmapEIA, pollution consent, PESO and MSIHC steps in the order your state needs them.
NPCS's client list records 4 assignments for ethylene oxide and 269 in organic and specialty chemicals, for entrepreneurs and companies in India and abroad.
What's inside the ethylene oxide sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
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Ethylene Oxide project report: frequently asked questions
How much does an ethylene oxide plant cost in India?
It depends mostly on capacity and on how ethylene and oxygen reach the site. Our sample report models a compact 8.8 MT per day unit at ₹1,217.77 lakh, with ₹589.95 lakh in plant and machinery. Most EO in India is made in far larger integrated complexes, so treat the sample as a format guide and get a report sized for your own project.
What is the raw material for ethylene oxide?
Ethylene is the main raw material, with oxygen as the oxidant and a silver catalyst. In our sample report ethylene is 86% of raw material cost and oxygen 9%. In theory 0.64 tonne of ethylene makes one tonne of EO; real plants use more because part of the ethylene burns to carbon dioxide and water.
How is ethylene oxide manufactured?
Almost all EO is made by direct oxidation. Ethylene and oxygen pass through tubes filled with silver catalyst, and the EO formed is absorbed in water, stripped out and distilled. Unreacted gas is recycled after carbon dioxide is removed. The reaction gives off a lot of heat, which is taken away by coolant and used to raise steam.
Is an ethylene oxide plant profitable?
In our illustrative sample, an 8.8 MT per day unit earns a 19.4% return on investment in Year 3. It breaks even at 38.3% of capacity and pays back in about 3.8 years. Real results depend on the price gap between ethylene and EO, catalyst life, plant uptime and whether you sell EO or convert it into derivatives.
Which licences are needed to store ethylene oxide?
EO is held as a liquefied gas under pressure, so storage needs a PESO licence under the SMPV(U) Rules 2016, with prior approval of the layout. EO is also listed under the MSIHC Rules 1989, which set duties such as emergency plans and safety reports once stock crosses the listed thresholds. State pollution consent and environmental clearance apply as well.
What is ethylene oxide used for?
Most EO is turned into mono ethylene glycol for polyester and coolants. The rest goes into ethoxylates and non-ionic surfactants, ethanolamines, glycol ethers and polyethylene glycols. A small share is used to sterilise medical devices that cannot take heat or steam. These derivative makers are the usual buyers for a merchant EO unit.
Is the ethylene oxide project report PDF free, and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report. Its figures are representative and not based on a real project, so it should not be submitted to a bank. For a loan, NPCS prepares a report for your own capacity, site and financing plan.
Sources and references
- The Manufacture, Storage and Import of Hazardous Chemical Rules, 1989Punjab Pollution Control Board, checked Oct 2026
- Standard operating procedure for the SMPV(U) Rules, 2016Petroleum and Explosives Safety Organisation, checked Oct 2026
- IS 5573:1984 Specification for ethylene oxideBureau of Indian Standards, checked Oct 2026
- Environment Impact Assessment Notification, 2006Department of Science, Technology and Environment, Government of Puducherry, checked Oct 2026
- Categorisation of industrial sectors under Red as per CPCB criteriaState Pollution Control Board, Odisha, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.