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
Despite a decline in sugar production, numerous industry stakeholders predicted that ethanol diversion will remain stable at 4.5 million tons, up from 3.6 million tons in 2021–22 (October–September).
In addition to cutting its earlier forecast of 34 million tons of sugar production for the current marketing year, which ends in September, the Indian Sugar Mills Association (ISMA) has also revised its expectation of the amount of sugar that will be diverted to ethanol from 4.5 million tons to 4 million tons. The decrease in sugar production in Maharashtra from an earlier prediction of 12.1 million tons to 10.5 million tons in the 2022–23 marketing year (October–September) is the cause of the downward adjustment. However, despite a decline in sugar production, numerous industry stakeholders predicted that ethanol diversion will remain stable at 4.5 million tons, up from 3.6 million tons in 2021–22 (October–September). The reason behind this prediction can be the government’s efforts to divert the broken rice and maize towards the production of ethanol.
In case of Maharashtra, it is expected to witness a serious decline in sugar production and is anticipated to miss the ethanol supply target as out of 210 sugar mills in the state, only six are operational due to a drastic drop in per-hectare cane yield and a decrease in sucrose content in sugarcane. Maharashtra's contribution during the ethanol supply year (December 2022 to November 2023) would be 127 crore liters, significantly less than its aim of 132 crore liters, according to new estimates by cooperative and private millers.
Additionally, compared to earlier forecasts of 120–22 lakh tons, they predict that the state will only produce roughly 105–106 lakh tons of sugar. Earlier, in July–August 2022, the Maharashtra Sugar Commissioner's office predicted the production at 138 lakh tons, helped by favourable weather and increased cane acreage. So far, mills in the state have crushed 1,051.30 lakh tons of cane and produced 104.88 lakh tons of sugar.
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. 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.
Industry experts have said that despite a fall in the sugar production in Maharashtra which has the highest total installed capacity of ethanol production in the country, there won’t be a decline in the ethanol production and the ethanol diversion will be steady at 4.5 million tons as against 3.6 million tons in 2021-22.
The Government of India in order to ensure efficient ethanol production had banned the export of broken rice in September 2022. The government had amended the broken rice export policy in order to ensure adequate availability of broken rice for consumption by domestic poultry industry and other animal feedstock; and to produce ethanol for successful implementation of EBP (Ethanol Blending Programme) programme. According to experts, the primary reason behind the prohibition on the export of broken rice is to meet the targets of ethanol blending program. Sugar-based feed stocks alone cannot meet the 1100 crore litres of ethanol required for 20 percent ethanol blending by 2025. The chart below shows the export of broken rice from India during the last five years.
The export of broken rice has been rising continuously over the years. In the FY 2017-18, 1200.355 tons of broken rice was exported from India. The FY 2019-20 witnessed a massive decline in the exports of broken rice due to the outbreak of the covid-19 pandemic which forced the government to impose nationwide lockdowns and which ultimately disrupted the global supply chains. Only 270.338 tons of broken rice was exported in the FY 2019-20. The exports in the FY 2020-21 registered a growth of 663.7 percent as 2064.562 tons of the essential commodity was exported to different countries. The FY 2021-22 witnessed the highest exports of broken rice till date as 3890.866 tons of broken rice was exported. But the export of broken rice fell drastically in 2022-23 as much of the broken rice was diverted to poultry industry and ethanol blending programme.
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. The ethanol supply year is calculated from November 1 to October 31st. The government has taken a number of steps for increasing the ethanol production in the country as its beneficial for the OMCs, farmers, economy and the environment too.
