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India 29-Jun, 2024

India achieves 15% ethanol blending in May 2024: Aims for 20% by next year

By: Team India Tracker

India achieves 15% ethanol blending in May 2024: Aims for 20% by next year

The ethanol production capacity in India has increased from 423 crore litres in 2019-20 to 1,380 crore litres in 2023-24. Image Source: IANS

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 increased purchases from biofuel makers, the ethanol blending in petrol has exceeded 15 percent in May. According to data from the oil ministry, state-run oil marketing businesses blended 670 million litres of ethanol with petrol in May, achieving an average blending ratio of 15.4 percent. In order to attain a monthly blending ratio of 12.7 percent, 515 million litres of ethanol were consumed in April. This is a significant increase.

Over 3.51 billion litres of ethanol have been blended for the current ethanol supply year, which started in November 2023, with a national average of 12.6 percent. In the 2022–2023 ethanol supply year, the average blending was 12.1 percent; in 2021–2022 and 2020–21, it was 10 percent. Ten years ago, it was 1.5 percent. India wants to raise the average national blending percentage to 20 percent by the next year. Approximately 14,600 fuel stations run by state oil corporations are currently offering petrol that has been blended with 20 percent ethanol.

Ethanol has about a third less energy per unit volume than petrol. A 20 percent ethanol-blended petrol, therefore, offers about 6-7 percent less fuel efficiency.

Upon assuming the office and addressing the media, Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri emphasised the accelerated goal, originally set for 2030, demonstrating India's commitment to enhancing its energy matrix. “In the month of May only, we were able to cross 15 percent of ethanol blending Based on the current progress, I am reasonably confident that the 20 percent blending target will be completed by the year 2025," he remarked.

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.

Source: Ministry of Consumer Affairs, Food & Public Distribution and Ministry of Petroleum and Natural Gas

Puri emphasised the introduction of green hydrogen projects as part of India's plan to lower carbon emissions in addition to the integration of biofuels. "The first green hydrogen plant (10 MW) was commissioned on 27th May 2024, even as elections were on. Many of our Oil PSUs are in the process of issuing tenders for the supply of green hydrogen," said Puri. He also mentioned Kochi's operating green hydrogen plant, which supplies buses from Kochi Airport and represents a major advancement in environmentally friendly public transportation.

The ethanol production capacity in India has increased from 423 crore litres in 2019-20 to 1,380 crore litres in 2023-24. 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.

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 sugar mills' cash flows have improved through the sale of ethanol, enabling them to pay cane growers promptly. 98.3 percent of farmers' cane dues in Sugar Season (SS) 2022–2023 and 99.9 percent of cane dues in the prior Sugar Season 2021–2022 have been paid by sugar mills.

The sale of ethanol has brought in more than 94,000 crores in revenue for sugar mills over the past ten years. Production of ethanol has led to proportionate reduction in the import of petrol or crude oil which has resulted in saving of foreign exchange for India. In 2022-23, with production of about 502 crore litres of ethanol, India has saved about ₹ 24,300 crores of foreign exchange and improved India’s energy security.

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