Govt expects $5.5-b investments in ethanol sector by 2025

Rishi Ranjan Kala | | Updated on: Jan 31, 2022

COPENHAGEN ENVIRONMENT PHOTO PACKAGE Photo taken on June 1, 2006 in Chalons-en-Champagne of an Ethanol station for cars powered by bioethanol (EBS). This petrol substitute is mainly produced by the sugar fermentation process. AFP PHOTO ALAIN JULIEN | Photo Credit: ALAIN JULIEN

Ethanol blending with petrol will help reduce import bill by $4 billion annually

In a bid to push reforms aimed at promoting clean energy, India aims to blend 10 per cent ethanol with petrol this year and double it to 20 per cent by 2025, for which the government expects investments to the tune of $5.5 billion, or roughly ₹41,000 crore in the next three years, said the Economic Survey 2021-22 on Monday. Ethanol blending can help India save on foreign exchange to the tune of $4 billion (around ₹30,000 crore) on an annual basis in its import bill. “The government is expecting an investment of up to $5,541 million to help India achieve its ethanol blending target of 10 per cent by 2022 and 20 per cent by 2025,” said the survey report, which was tabled in Parliament on Monday. On June 5, 2021, Prime Minister Narendra Modi announced 20 per cent ethanol blending in petrol by 2025. The ambitious target, which brings forward the blending target from 2030 to 2025, is a key element of the economy-wide energy transformation. As of September 2021, the country has already reached 8.5 per cent ethanol blending, and is on track to achieve the 20 per cent target by 2025, it added. “Considerable benefits can accrue to the country by ethanol blending, such as saving $4 billion foreign exchange per year in imports, enhancing energy security, lowering carbon emissions, improving air quality, promoting productive use of damaged food grains and waste, increasing farmers’ incomes, creating employment and investment opportunities,” the survey noted. With a view to achieving these targets, the government has allowed production of ethanol from different feed stocks — B-Hy & C-Hy molasses, cane juice, sugar syrup, sugar and damaged food grains, including surplus FCI rice and maize, by the distilleries either attached with sugar mills or standalone ones. Ethanol supply under the ethanol blending programme (EBP), which was only 38 crore liters in Ethanol Supply Year (ESY) 2013-14, increased to 173.3 crore liters during ESY2019-20, and is expected to be more than 302 crore liters by the end of ESY 2020-21 to achieve approximately 8.1 per cent blending. Ethanol blending target for ESY2021-22 is 10 per cent, which is to progressively increase to 20 per cent by 2025. During the past four sugar seasons ending 2020-21, a revenue of about ₹35,000 crore has been generated by sugar mills/ distilleries from sale of ethanol to Oil Marketing Companies (OMCs), which has helped in clearing cane price arrears of farmers.

Published on January 31, 2022
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