State-run oil marketing companies (OMCs) will procure more than 335 crore litres of ethanol from upcoming manufacturing facilities of the biofuel across eight States and two Union Territories.

OMCs’ Ethanol Procurement Group (OEPG) intends to procure through a long-term off-take agreement with upcoming dedicated ethanol plants (DEP) in Tamil Nadu, Kerala, Andhra Pradesh, Telangana, Gujarat, Rajasthan, Goa and Odisha as well as Union Territories of Jammu & Kashmir and Ladakh to procure denatured anhydrous ethanol.

The OMCs — Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) — will collectively procure 335.68 crore litres of ethanol annually from plants that are slated to start commercial operations in two years from the date of signing of the offtake agreement.

Procurement plan

The latest details, issued on March 5, are in continuation of the requirement for ethanol provided by the OMCs on February 9, under which the refiners had set requirements to procure 86.94 crore litres of ethanol from upcoming DEPs.

As per the latest details, the OMCs will procure the highest 87.22 crore litres annually from Rajasthan followed by Tamil Nadu (55.79 crore litres), Gujarat (48.99 crore litres), Andhra Pradesh (45.37 crore litres), Odisha (34.75 crore litres), Telangana (32.41 crore litres), Kerala (16.50 crore litres), Goa (7 crore litres) and collectively from J&K and Ladakh (9.65 crore litres).

“Tripartite Agreement (TPA) shall be signed with the shortlisted bidders who have entered into long-term offtake agreement and desiring to have TPA for availing finances from the banks /financial institutions,” the EoI document said.

Those project proponents, including PSUs other than IOCL, BPCL & HPCL, who intend to set up or are in the process of setting up DEP may apply through this EoI. Bidders who have setup the plant and have not started production prior to the date of publication of this EoI shall also be eligible to apply.

Through the ethanol blending programme (EBP), the aim is to promote biofuels, enhance farmer’s income and reduce the import bill on crude oil, which stands at more than $157 billion in FY23.

The OMCs are offering a price of ₹56.28 per litre for ethanol made from C-Heavy Molasses, ₹71.86 a litre for maize and ₹64 per litre for ethanol made from damaged foodgrains.

Ethanol blending target

The All India Sugar Traders Association (AISTA) said that the ethanol blending target is likely to fall to 10 per cent in ethanol supply year (ESY) 2023-24 (November-October) from 12 per cent in ESY 2022-23, in a presentation made on Wednesday at the Dubai Sugar Conference in the UAE. The presentation was made by AISTA Vice Chairman Ravi Gupta, who is also an Executive Director at Renuka Sugars.

The development impacts the government’s EBP, under which it aims to achieve an ethanol blending rate of 15 per cent in ESY 2023-24.

As per the AISTA presentation, India achieved ethanol blending of 11.28 per cent (147.6 crore litres) as of February 18, 2024 against 11.25 per cent (114.5 crore litres) during February 18, 2023.

(with inputs from Prabhudatta Mishra)