The Tamil Nadu government on Saturday unveiled ‘Ethanol Blending Policy 2023’ with the objective of improving farmer incomes through ethanol blending opportunities, reviving the sugar industry, and making the State an investment hub for alternate cost-effective green fuel.

As per the document, the policy will help to meet the growing demand for petrol and increase refining capacity in the State. Tamil Nadu stands third in motor spirit petrol consumption after Uttar Pradesh and Maharashtra in 2021-22, it stated. The State’s petrol requirement, which is predominantly imported, is estimated to increase to 474 crore litres by 2024-25.

Currently, Chennai Petroleum Corporation Ltd has an installed refining capacity of 10.5 million metric tonnes in Chennai with a proposal to augment it by one million metric tonnes. “Considering a moderate share of demand from neighbouring States, Tamil Nadu offers an opportunity for manufacturing 1.3 billion litres by 2025 to service the regional demand,” the policy noted. 

Target requirements

The policy further said, to achieve the government of India’s ethanol blending target of 20 per cent, the fuel-grade ethanol requirement works out to be 0.9 billion liters. In 2003, the government of India launched the Ethanol Blended Petrol (EBP) program with a target of supply of 5 per cent blending of ethanol in petrol to address environmental concerns from the transportation sector, reduce import dependency and boost the agriculture sector. The target was later revised to achieve 20 per cent blending by 2025. Tamil Nadu’s policy seeks to support the indigenous production of fuel grade ethanol under the EBP Program. 

The ethanol policy also said the State currently has installed plant capacity of 664 kilo liters per day (KLPD) specifically to produce fuel-grade ethanol under the EBP, with a further 160 KLPD capacity in pipeline. “The existing plants and immediate pipeline of projects are molasses based, and several investors have expressed interest to invest and establish standalone grain-based ethanol plants,” it added. 

Through the policy, the Tamil Nadu government aims to attract ₹5,000 crore of investments towards setting up/ enhancing ethanol production capacities besides meeting its ethanol blending requirement of 130 crore liters during the policy period. It will be valid for a period of five years from the date of notification