Friday, 17 May, 2024
By: Yash Gupte
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. Image Source: IANS
India is expected to generate 330 lakh tonnes of sugar for the current sugar season of 2022–2023 after diverting roughly 43 lakh tonnes for ethanol production.
Union Food and Public Distribution Secretary Sanjeev Chopra stated on Thursday that the centre is confident in achieving its goal of 12 percent ethanol blending with petrol by the end of the current ethanol supply year, which ends in October.
This follows the temporary suspension of the supply of rice for ethanol manufacturing in July by the government purchasing agency Food Corp of India. The production of ethanol from rice and maize lowers carbon emissions and contributes to the annual removal of 12 million automobiles' worth of carbon off the road.
The government has increased its price a second time to offset the greater cost of damaged grains within 15 days in an effort to hasten the use of ethanol-petrol blends as vehicle fuel. Notably, since the Food Corporation of India (FCI) started supplying discounted rice to distilleries, the price of damaged grain has increased by Rs 4-5 per kg in the past month.
India is expected to generate 330 lakh tonnes of sugar for the current sugar season of 2022–2023 after diverting roughly 43 lakh tonnes for ethanol production. It is anticipated that domestic consumption will be roughly 275 lakh tonnes. Meanwhile, Aditya Jhunjhunwala, President of Indian Sugar Mills’ Association said that the government should come out with a clear roadmap on ethanol sourcing from the sugar industry. He added, “We (the sugar industry) need to double capacity to produce 750 crore litres. We need to put up more plants and that requires capex and time. We need a clear road map and the prices should be based on a long-term formula taking into consideration the FRP, inflation, sugar prices etc.”
The Union Government has laid a major emphasis on the production of ethanol in the country and also blending it with petrol. The government has taken various steps in providing a boost to the ethanol production and ethanol production capacity in the country. 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.
Also, recently in the month of February, 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 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.
Oil India, a state-run company, plans to invest over Rs 8,000 crore in the 2G (second generation) ethanol market in light of India's desire for biofuels and the recent launch of the Global Biofuels Alliance. Oil India and Numaligarh Refinery Ltd. (NRL), a subsidiary, would make the combined investment. The plant would be setup by the latter. Ranjit Rath, the CMD of Oil India, told the media that the corporation is investing a total of Rs 25,000 crore to reach net zero by 2040, including in solar energy, 2G ethanol, green hydrogen, compressed biogas (CBG), and compressed hydrogen.
Recently, Union minister Piyush Goyal launched a new Sugar-Ethanol portal, taking a big step towards encouraging renewable energy sources and lowering reliance on fossil fuels. The portal, which was introduced at the "National Conference of Food Ministers of States/UTs," intends to increase sugarcane-derived ethanol production and consumption in India. The portal provides information on legislation, regulations, market trends, and the most recent advancements in the industry, acting as a complete platform for stakeholders in the sugar and ethanol industries.
Ethanol is environment friendly as one crore litre of ethanol blended petrol can save around 20,000 tons of carbon dioxide emission. Greenhouse gas emissions due to the EBP Programme were reduced by 318.2 lac tons during 2014 to November 2022.
The chart shows that the diversion of sugar for the ethanol production has increased from 0.33 MT in 2018-19 to 3.6 LMT in 2021-22 and it is estimated that about 4.5 million tons of sugar would be diverted for the production of ethanol.
Additionally, in order to strengthen the financial position of sugar mills and enable them to pay farmers cane dues on time, the central government had implemented a number of measures, including extending assistance to mills to facilitate sugar export, extending assistance to mills to maintain buffer stocks, extending soft loans to sugar mills through banks to pay farmers cane dues, and fixing the minimum selling price of sugar, among others. According to the government, the financial condition of sugar mills has improved and more than 99 percent of cane dues up to sugar seasons 2020-21 and 97.40 percent of cane dues for sugar season 2021-22 have been cleared.
Source: Press Information Bureau
The chart below shows the exponential rise in payment to farmers enabled by the EBP programme.
The chart shows that there is a rise in payment to farmers enabled by the EBP Programme. From Rs. 1,119 crore in 2013-14, the payment to the farmers has increased to Rs.16,793 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.
