The government is planning to create a carry-over stock of ethanol for the next year anticipating a rise in demand for E20 fuel in the country, according to a senior food ministry official.

E20 fuel is a blend of 20 per cent ethanol with petrol. The government aims to achieve the 20 per cent ethanol blending target by 2025.

"Ethanol blending is going well. Oil Marketing Companies (OMCs) have started dispensing E20 fuel in about 100 outlets in 31 cities in the country. We have started E20 fuel, if it goes well then the requirement will be more," Additional Secretary in the food ministry Subodh Kumar said.

Like sugar, the government "plans to create a carryover stock of ethanol" with OMCs and distilleries for 2023-24 ethanol year (December-November) and more sugar would be diverted for the same, he said.

Blending target

The government has kept the 12 per cent ethanol blending target in the ongoing 2022-23 ethanol year, while 15 per cent for the next year.

"About 120 crore litres has been blended with petrol till February-end. We are continuously blending 12 per cent. The ethanol availability and production capacity is sufficient to meet this year's target," the official said.

For the current year, about 5 million tonnes of sugar is estimated to be diverted for ethanol production, higher than 3.6 million tonnes in 2021-22.

To meet 15 per cent blending target next year, the official said additional 150 crore litres of ethanol would be required and the government is encouraging sugar mills and distilleries to enhance production capacity.

Ethanol production

The ethanol production capacity has gone up to 1,040 crore litres till February this year. The government is encouraging ethanol capacity creation under an interest subvention scheme.

The official said the government has approved 243 projects and banks have already sanctioned ₹20,334 crore loans and out of which ₹11,093 crore has been disbursed.

Last week, the government reviewed the upcoming projects and about 250-300 crore litres of ethanol capacity will come in the next 9-10 months, he added.