Tuesday, 14 Jan, 2025
By: Yash Gupte
In addition to helping farmers, India saved up to Rs 53,894 crore in foreign exchange expenditure by blending 10 percent ethanol with petrol. Image Source: IANS
The 20 percent ethanol-blended petrol was launched by PM Narendra Modi two months ahead of the planned rollout in April at the India Energy Week in Bengaluru, Karnataka.
On Monday, February 6, 2023, 20 percent ethanol-blended petrol was made available at a few select petrol pumps in 11 states and the union territories as part of a campaign to increase the use of biofuels to reduce emissions and reliance on foreign exchange depleting imports. The 20 percent ethanol-blended petrol was launched by PM Narendra Modi two months ahead of the planned rollout in April at the India Energy Week in Bengaluru, Karnataka. The India Energy Week is being held from February 6-8, 2023. Narendra Modi said, “We have increased ethanol blending in petrol from 1.5 percent in 2014 to 10 percent and are now progressing towards 20 percent blending.
In addition to helping farmers, India saved up to Rs 53,894 crore in foreign exchange expenditure by blending 10 percent ethanol with petrol. E-20 (petrol containing 20 percent ethanol) will be available at 84 gas stations operated by three state-owned fuel distributors in 11 States and UTs.
A “Roadmap for Ethanol Blending in India 2020-25” was released by the PM in June 2021 which laid out a detailed pathway for achieving 20 percent ethanol blending. Due to the coordinated efforts of the Public Sector Oil Marketing Companies (OMCs) and the increase in diversion of sugar for ethanol production, the target of 10 percent blending under the programme had been achieved much ahead (August 2022) of the targeted deadline of November 2022 wherein the Public Sector OMCs have attained an average 10 percent ethanol blending in petrol across the country.
The chart below shows the ethanol production capacity in the country.
The ethanol production capacity in India has increased from 423 crore litres in 2019-20 to 947 crore litres in 2022-23. This means that the ethanol production capacity has doubled in just three years. The Central Government has taken various steps to increase production and utilization of ethanol. The Government has amended the Industries (Development & Regulation) Act to ensure free movement of ethanol in the country. The Government has also reduced Goods & Service Tax (GST) on ethanol meant for Ethanol Blended with Petrol (EBP) Programme from 18 percent to 5 percent since 2018.
Under the ethanol blending programme, an indicative target of 20 percent blending of ethanol in petrol by 2030 was laid out. Subsequently, the target year for achieving 20 percent ethanol blending in petrol was also advanced to 2025. By blending 20 percent ethanol, the nation could experience significant benefits, including energy security, reduced carbon emissions, improved air quality, self-reliance, the use of damaged food grains, an increase in farmer incomes, the creation of jobs, and more investment opportunities. Also, the central government is urging sugar mills to divert extra sugarcane to ethanol in order to find a long-term solution to the issue of excess sugar. About 45–50 LMT of extra sugar in the current sugar season (2022–2023) is intended to be converted to ethanol. According to Sudhanshu Pandey, secretary, department of food and public distribution, these activities are leading to transforming the Indian farming community from ‘Anna Daata’ to ‘Urja Daata.’
The chart below shows the top 5 states with total installed ethanol production capacity.
Maharashtra has the highest total installed capacity of ethanol production in the country followed by Uttar Pradesh and Karnataka. At present, Maharashtra has around 127 plants with a production capacity of 268 crore litres of ethanol. National Federation of Co-operative Sugar Factories Limited (NFCSFL) Chairman Jayprakash Dandegavkar told PTI that the sugar industry in Maharashtra will also be called as the energy industry in times to come. In a major boost to Maharashtra’s ethanol production capacity, Swaraj Green Power and Fuel Limited had announced in January 2022 to set up the largest ethanol plant with a production capacity of 1100 Kilo Litres Per Day (KLPD) in Maharashtra in two stages. Once completed, this will be Asia’s largest ethanol production unit.
Uttar Pradesh with the second highest capacity of ethanol production has 75 distilleries. The state government is further establishing 17 new distillery units which are expected to be commissioned in the next two years, said Sanjay R. Bhoosreddy, additional chief secretary, excise and sugar industries and cane development department, Government of Uttar Pradesh.
The chart below shows the exponential rise in payment to farmers enabled by the EBP programme.
Source: Press Information Bureau
The chart shows that there is a rise in payment to farmers enabled by the EBP Programme. From Rs. 1119 crore in 2013-14, the payment to the farmers has increased to Rs.16793 crore in 2021-22. In addition to this, in the past six years, ethanol supplies and blending percentages have surged by more than five times. In past three Ethanol Supply Years (December- November), revenue of about Rs. 48,573 crore has been realized by sugar mills from the sale of ethanol to Oil Marketing Companies (OMCs), which has helped sugar mills/molasses based distilleries to make timely payment of cane dues of farmers. Therefore, with a view to support sugar sector and in the interest of sugarcane farmers, the central government is encouraging sugar mills to divert excess sugarcane & sugar to ethanol.
This shows that apart from saving foreign exchange reserves, ethanol blending has been beneficial for farmers, OMCs and the environment too.
