NEW DELHI: In a boost to India’s energy security efforts, the country’s ethanol distillation capacity will double by 2025, and ethanol blending with petrol (EBP) will help save foreign exchange of more than ₹30,000 crore, according to a top government official.
While briefing reporters on Tuesday, secretary, department of food and public distribution, Sudhanshu Pandey, said India will achieve 20% target for EBP. Prime Minister Narendra Modi recently said the target of 20% ethanol blended petrol has been preponed by five years to 2025.
This assumes significance given that every dollar increase in price of crude oil raises India’s import bill by ₹10,700 crore on an annualised basis. India spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19.
Also, around 5 crore sugarcane farmers and their families and 5 lakh workers associated with sugar mills and other ancillary activities will be benefitted, Pandey added according to a statement from consumer affairs, food and public distribution ministry.
This comes in the backdrop of protests by farmers against new farm laws. The government has been pushing for ethanol production with surplus sugar production depressing sugar prices and consequently increasing the dues of sugarcane farmers.
“Sugarcane farmers will get timely payment of sugarcane dues as the realization from sale of ethanol is much faster than sale of sugar,” the statement said, adding that “It may be noted that India is facing a situation of plenty with surplus sugar, leading to liquidity problem to sugar mills and delayed payments of cane dues. The Government is encouraging sugar mills to divert excess sugarcane to ethanol which is blended with petrol.”
The National Biofuel Policy 2018 had earlier envisaged an indicative target of 20% blending of ethanol with petrol and 5% blending of biodiesel with diesel by 2030. The blending percentage of ethanol with petrol has also gone up from 1.53% in 2013-14 to 8.5% in 2020-21.
“Pandey said in the next sugar season 2021-22, about 35 LMT of sugar is estimated to be diverted & by 2025 about 60 LMT of sugar is targeted to be diverted to ethanol, which would solve the problem of excess sugarcane/ sugar and would also help sugar mills in clearing cane price dues of farmers. Shri Pandey said that in the past three sugar seasons about Rs. 22,000 crore revenue was generated by sugar mills/ distilleries from sale of ethanol to OMCs,” the statement added.
Increased ethanol blending with fossil fuels will help reduce pollution and strengthen India’s resolve towards fulfilling commitments made at COP-21, the UN Climate Change Conference held in France in 2015.
“He further informed that due to upcoming investment of about ₹41,000 Crore in capacity addition / new distilleries, various new employment opportunities will be created in rural areas and strengthen the agricultural economy. Shri Pandey said this would save foreign exchange of more than ₹30,000 crore on account of crude oil import bill and would reduce dependence on imported fossil fuel thereby would help in achieving the goal of Atmanirbhar Bharat in petroleum sector,” the statement added.
India has an ethanol production capacity of 684 crore litre. For the targeted 20% blending of ethanol in petrol by 2030, the country will need a 1,000-crore litre capacity.
“He said that the production of fuel grade ethanol and its supply to OMCs has increased by 5 times from 2013-14 to 2018-19. In ESY 2018-19, we touched a historically high figure of about 189 crore litres thereby achieving 5% blending. It is expected that in current ethanol supply year 2020-21, more than 300 crore ltrs ethanol is likely to be supplied to OMCs to achieve 8 to 8.5 % blending levels. It is also likely that we would be achieving 10% blending target by 2022,” the statement said.
This comes in the backdrop of the Cabinet Committee on Economic Affairs (CCEA) in December approving a ₹8,460 crore modified scheme for extending interest subvention for those setting up standalone ethanol distilleries. The focus is for increasing India’s ethanol production capacity, with the scheme extended to those setting up distilleries using grain, molasses, dual feed, sugar beet, sweet sorghum, and cereals as a feedstock.
“Secretary, DFPD further briefed that till year 2014, ethanol distillation capacity of molasses-based distilleries was less than 200 crore litres. Supply of ethanol to OMCs was only 38 crore litres with blending levels of only 1.53 % in ethanol supply year (ESY) 2013-14. However, in past 6 years due to the policy changes made by the Government, the capacity of molasse- based distilleries have been doubled and are currently at 445 crore litres. Capacity of grain-based distilleries are presently about 258 crore litres,” the statement said.
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