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Prime Minister Narendra Modi, on Saturday, said that India is showing the world that preservation of the environment does not need to be a roadblock in development activities.
“India is presenting an example in front of the world that blocking development activities is not necessary for environmental protection. Both economy and ecology can move forward together. This is the path that India has chosen,” Modi said while announcing a ramp up in the national ethanol blending target on the World Environment Day.
He released the 2020-25 ethanol blending roadmap made by the Niti Aayog. “Blending locally produced ethanol with petrol will help India strengthen its energy security, enable local enterprises and farmers to participate in the energy economy and reduce vehicular emissions,” said the report said.
The Ministry of Petroleum and Natural Gas has directed oil marketing companies to sell petrol blended with up to 20 per cent ethanol by April 2023, bringing forward the existing target by two years. Earlier, it had advanced the deadline by five years to 2025.
The roadmap
The government has allowed sugarcane-based raw materials (heavy molasses), sugarcane juice or sugar, surplus and damaged rice lying with Food Corporation of India and maize to be used in fuel-grade ethanol-producing distilleries.
These plants are bound to pay fixed prices for the raw material they procure from farmers. The price of ethanol produced from sugarcane sources is approved by the Cabinet Committee on Economic Affairs, while that from foodgrains is decided by OMCs.
While petrol is subject to excise duty, GST is levied on ethanol. “While GST would be in the range of ₹2.28/litre to ₹3.13 per litre of ethanol based on an ex-mill price in the range of ₹45.69/litre to ₹62.65/litre, excise duty on petrol is ₹32.98/litre,” the official roadmap said.
“Considering total national ethanol blending volumes of 332 crore litre, revenue loss to the Central government due to replacement of petrol by ethanol amounts to ₹10,950 crore per annum,” it added.
OMCs pass on to their consumers any change in the price of fuel due to blending of ethanol and are therefore not impacted by the pricing of ethanol.
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