Friday, 17 May, 2024
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
The Union Government has laid a major emphasis on the production of ethanol in the country and also blending it with petrol.
The production and consumption of ethanol as an alternative fuel source should be encouraged by State governments as it will benefit farmers and the environment simultaneously, said Union Minister of Road Transport and Highways Nitin Gadkari. The Union Minister declared during a rally that India would not only use ethanol for its cars but also grow into a major exporter of the fuel worldwide. “In the near future, we will see vehicles that are run by ethanol and methanol on our roads. It will help reduce environment pollution and increase the economic well-being of farmers,” he said.
“There are many opportunities for ethanol production and consumption in sugarcane producing areas like Belgavi. Farmers should not see themselves only as suppliers of raw material to sugar industries, but also as energy producers as these factories will be able to produce ethanol and earn profits,” Mr. Gadkari said.
Also, earlier while speaking at an event in Pune, Gadkari said that the central government will review the ethanol policy. Nitin Gadkari said that the sugar industry in Maharashtra should focus more on production of ethanol than making sugar. Following harsh criticism from the Maharashtra industry on the prohibition on using sugar syrup for the production of ethanol, the state government announced that it would bring up the issue with the central government.
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.
About 1016 crore litres of ethanol are needed to reach the 20 percent blending target by 2025; the overall amount of ethanol needed, including for other purposes, is 1350 crore litres. If the plant runs at 80 percent efficiency, over 1700 crore litres of ethanol-producing capacity must be in place by 2025. The government has forecasted the amount of ethanol needed for a 20 percent blend by 2025, taking into account the anticipated expansion of petrol-powered cars in the passenger and two-wheeler segments as well as the anticipated sales of Motor Spirit (MS).
Source: Ministry of Consumer Affairs, Food & Public Distribution and Ministry of Petroleum and Natural Gas
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.
Source: Press Information Bureau
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.
