Agri Business

Government mulls advancing 20% ethanol blending target

Our Bureau New Delhi | Updated on November 21, 2020

May also tap rice lying with FCI and maize from surplus States

The Centre, which is trying to create an additional 468-crore litre ethanol capacities through loans for setting up distilleries, may advance the deadline for blending 20 per cent biofuel in petrol from the earlier announced 2030.

“The government had earlier fixed a target of 10 per cent ethanol blending by 2022 and 20 per cent by 2030 but now the government is preparing a plan to prepone achievement of 20 per cent target,” an official release said on Friday.

Apart from sugarcane, the government also plans to use surplus rice lying with Food Corporation of India and maize in States where maize production is in surplus for producing ethanol from coming ethanol supply year (November to December).

The government has earlier in principle approved loans worth ₹12,500-crore for setting up distilleries for producing 468-crore litres per annum. “Already loans worth ₹3,600-crore sanctioned for setting 70 ethanol projects in the last two years,” the release said.

‘Helping sugar mills’

This would also help sugar mills – which are producing on an average 320 lakh tonnes (lt) of sugar annually – convert excess sugarcane or sugar for producing ethanol. As the domestic sugar demand is around 260 lt, currently the government is supporting the mills to export the sweetener by extending financial assistance.

However, as per the WTO conditions, India will not be able to extend financial help for marketing and transport beyond 2023. The excess 60 lt sugar that remains unsold, blocks funds of sugar mills to the tune of ₹19,000-crore annually, affecting their liquidity position resulting in accumulation of cane price arrears of farmers, it said.

Published on November 20, 2020

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