The Hindu Business Line : The ethanol blending mess

The Government should make the 10 per cent blending of petrol with ethanol mandatory without further delay. The indecision on its part has already cost the nation dearly in a period marked by high oil prices.

Use of ethanol or bio-diesel would bring in a new era of prosperity for the agricultural sector.

Sharad Joshi

Last year the Cabinet Committee on Economic Affairs (CCEA) had approved 10 per cent blending of petrol with ethanol. Since then, farmers have been waiting anxiously for the month of October 2008. They are hoping that October 2008 will bring the permission, if not a statutory obligation, to blend petrol with 10 per cent ethanol.

In many fora, leaders close to the power centre had assured all concerned that the decision to allow 10 per cent blending had already been made and it was only a question of time before it was implemented.

There appears to be no reason why this promise should not be met. Countries such as Brazil have been permitting blending of as much as 24 per cent without any modification of the existing engines or the suspensions of the automotive vehicles. In India, it is widely known that the Chief Minister of Chattisgarh runs his Tata Safari on 100 per cent bio-diesel.

If things can go wrong for farmers, they invariably do. Even before mid-September, the Government decided that the proposal of 10 per cent ethanol blended petrol should be shelved. It appointed several committees to go into the matter.

The Bureau of Indian Standards had laid down the technical specifications for 10 per cent ethanol blended petrol, clearing the way for increasing the blending percentage.

However, the Government now proposes a pilot project study to be undertaken by the Indian Oil Corporation and others using 10 per cent ethanol blended petrol in Maharashtra and Uttar Pradesh.

Simultaneously, the Automotive Research Association of India, the Indian Institute of Petroleum and the International Centre for Automotive Technology have all been asked to do pilot studies.

Since the UPA Government came to power in 2004, there have been many instances of important projects being sidetracked because they were kick-started by its predecessor, the NDA Government.

The only exception of an initiative of the NDA government being carried forward by the UPA government has been that of the Civil Nuclear Treaty with the US.

Govt indecision

The NDA Government had already issued orders to make 5 per cent blending of ethanol mandatory. Farmers and several stakeholders in agriculture welcomed that. Use of ethanol or bio-diesel would bring in a new era of prosperity for the agricultural sector as it opens up the technological possibility of converting almost all forms of biomass into an additive/substitute for fossil fuel.

However, the Government dragged its feet on the implementation of the 5 per cent blending mandate giving various excuses. The petroleum prices were rising all the while. India’s import bill on crude petroleum continued to climb.

The Government, nevertheless, did not consider it worthwhile to use local resources that could have brought down imports and the cost thereof. Promotion of domestic substitutes such as the ethanol would have been in the national interest.

The Government went slow on even the initiative that was taken by the NDA government and, to save appearances, promised, in the same breath, that a mandatory 10 per cent blending will be introduced from October 2008. It has not happened.

The question that arises is: Was a pilot study necessary or warranted at this stage?

It would appear that the resistance or the apprehensions of the Society of Automobile Manufacturers influenced the decision to defer blending of ethanol.

CNG story

Indian car-users have shown a great capacity for adopting new technologies. They are used to switching over from petrol engines to diesel engines and vice-versa in response to the relative price movements of the two fuels.

When the Supreme Court ordered compulsory use of CNG fuel in Delhi, the vehicle users made the conversion without any complaints even though the Supreme Court had not considered it necessary to appoint study groups for pilot studies on the suitability of engines or the availability of CNG fuel.

The highest court in the land considered that the use of CNG fuel was necessary to protect the environment in the Capital city. Once the judges made up their mind, they just passed the order. There was no difficulty whatsoever in the implementation of those orders.

The fact is that the Government is unable to make up its mind. This had happened earlier when the Genetic Engineering Approval Committee was deliberating on allowing the commercial plantations of BT cotton. It wasted seven years carrying on some unnecessary studies. It is only now that we realise that the delay is very expensive for the nation as a whole. But for the delay, India would have been at the top of the cotton producing countries at least seven years earlier.

History is repeating itself. Unfortunately, it is the farmers who are being victimised once again. Government intervention on the issue of substitution of fossil fuels was quite unnecessary. Bio-fuels are cheaper, cleaner, and most important, produced within India. The Government need not have gone back into its old licence-permit mindset.

It should have allowed production of ethanol without any hassles about licence or permit and left the proportion of blending as also the ability of the engine and the vehicle to the discretion of the car users.

It should have also left it to the ethanol producers to determine the prices rather than to the petroleum companies.

The procrastination on the part of the Government to make this vital decision on the blending proportion raises some serious doubts about the vested interests in the government leading to decisions that are so patently against the interests of the nation.

(The author is Founder, Shetkari Sanghatana and Member of Parliament (Rajya Sabha). blfeedback@thehindu.co.in)

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