Agri Business

Govt re-opens interest subsidy window for ethanol plants until October

Prabhudatta Mishra | | Updated on: Apr 22, 2022

Move will facilitate sugar mills to set up new distilleries or expand existing distilleries and thereby help in diverting excess sugarcane/sugar to ethanol

The Centre has invited fresh applications from those who have acquired land for ethanol project and obtained environmental clearance to avail interest subvention in setting up new distilleries or expansion of existing distilleries to produce ethanol out of cereals (rice, wheat, barley, maize and sorghum), sugarcane (including sugar, sugar syrup, sugarcane juice, B-heavy molasses, C-heavy molasses) and sugar beet.

In a notification issued on Friday, the Food Ministry said: “Now, the Central Government has decided to open a window for six months with effect from date of this notification under modified scheme dated January 14, 2021 for inviting fresh applications from those project proponents who have acquired land for ethanol project and obtained Environmental Clearance (EC) for enhancement of their existing ethanol distillation capacity or to set up new distillery for producing 1st Generation (1G) ethanol.”

Previously, the window was for 30 days when the government had invited applications in January 2021 and September 2020.

The government has been extending financial assistance in the form of interest subvention at six per cent per annum or 50 per cent of rate of interest charged by banks, whichever is lower, on the loans to be extended by banks for five years including one-year moratorium.

“The Centre’s decision will facilitate sugar mills to set up new distilleries or expand their existing distilleries and thereby help in diverting excess sugarcane/sugar to ethanol. New grain-based distilleries would come up in deficit States like North-East, southern States like Tamil Nadu, Andhra Pradesh, Telangana and States like Bihar, Madhya Pradesh, etc; this would help in distributed production of ethanol,” the ministry said in a statement.

Blending target

The government also said that as on April 17, about 158 crore litre ethanol have been blended with petrol, achieving 9.77 per cent blending in current Ethanol Supply Year (December-November). In ESY 2020-21, about 302.30 crore litre ethanol got blended with petrol, taking the EBP rate to 8.10 per cent, as against 1.53 per cent in 2013-14.

The Union government has fixed target of 10 per cent blending of fuel grade ethanol with petrol by 2021-22 and 20 per cent by 2024-25. The country’s ethanol production capacities are required to be enhanced to about 1,700 crore litre to achieve 20 per cent blending target whereas the total ethanol production capacity is about 849 crore litre — molasses-based distilleries 569 crore litre and grain-based distilleries 280 crore litre.

Published on April 22, 2022
COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you