Increase in Ethanol Procurement by around Rs.47000 Crores will lead to increase in farmer’s income

by Dr. Anjan Ray, Director of CSIR-Indian Institute of Petroleum
Since the past two decades, India has been making progress towards putting in place an ecosystem to increase the quantities of fuel-grade ethanol blended into petrol under the Ethanol Blended Petrol (EBP) program for use in vehicles, particularly two and four wheelers.  This effort has ramped up in recent years as multiple benefits of the EBP have become more apparent in light of volatile international energy markets and increased focus on decarbonization of transport fuels.  

Early in the 21st century before the EBP, the sugar mills of India were dependent upon central government quotas for sale of sugar, then a controlled product. The quota was fixed for each sugar mill for the year. A monthly order was released by the Government of India (GOI), basis which the sugar mills could sell the sugar in the open market. A small quota was also kept for Public Distribution System (PDS) sugar supplies for each sugar mill.

Roadmap of Ethanol Blending in India: Govt. of India on 5th June'21 has released a report of Expert Committee on Roadmap for Ethanol Blending in India by 2025. As per roadmap, 20% Ethanol blending is to be achieved by 2025 in a phased manner as under:

Due to the above initiatives of Govt. of India, the availability of Ethanol has improved since 2014 and has gone up from 67 Crore liters to around 450 Crore liters in the current Ethanol supply year. This has resulted in significant improvement in cumulative Ethanol blending percentage from 2.33% in 2014 to 10.00% as on June, 2022.

In order to meet the gap between current availability and the future requirements of Ethanol for EBP program, Oil Marketing Companies, under the guidance of MOPNG & DFPD, are encouraging the new entrepreneurs to setup dedicated ethanol plants in the state where Ethanol availability from Sugar based feedstocks is low.

OMCs have now signed long term agreements offering offtake assurance to 131 upcoming dedicated ethanol plants which will augment ethanol production capacity by Approx. 750 Cr. Ltr. per Annum. The investment in these plants will be around 40,000 Crores and employment generation for the country will be around 3 lac jobs. This is expected to improve the ethanol availability and help in achieving the blending targets set for the country.

The above plants are majorly grains (not for human consumption) based plants, which shall bring the flexibility on the ethanol availability from various feedstocks. This shall not only check the dependence of OMCs on Sugar / molasses based ethanol but also reduce the burden on water resources of the country due to switch from molasses based ethanol production to grain based ethanol production.

This increase in Ethanol Procurement by around Rs. 47000 Crores will lead to increase in farmer’s income.

Ethanol Blending of 1016 Cr. lit considering 20% blending by 2025, will result in savings of 200 Lakh MT of GHG emissions.
In line with the blending targets, Oil Marketing Companies are augmenting the blending infrastructure and have also initiated movement of Ethanol blended Petrol and Pure Ethanol by Tank Wagons.

OMCs are also setting up 2nd Generation Ethanol production plants. These plants use the paddy straw as raw material to produce ethanol. Currently this paddy straw in the country is getting burnt in the fields which result into air pollution in the surrounding areas.

Since this 2nd Generation Ethanol production technology is new in the country, Govt. of India has introduced Pradhan Mantri JIVAN Yojna to provide VGF (Viability Gap Funding) to the plants being set up in the country.

OMCs are setting up 5 2G bio-refineries with an investment of around Rs. 8,000 crore. These Bio refineries will help in reduction of stubble burning in farm lands of the country by diverting paddy straw for production of ethanol to these Bio refineries. 

Future uses of Ethanol: Ethanol being a pure chemical has existing uses like portable liquor, blending in Petrol, Pharmaceuticals etc.

Ethanol itself had multiple grades and multiple uses, ranging from potable alcohol and Indian-Made Foreign Liquor (IMFL) on the one hand to industrial alcohol used as a bulk chemical for production of specialty chemicals.

Ethanol has potential to be used as cooking fuel in ethanol based cooking stoves. Also it can be diverted to produce green hydrogen. Ethanol can also be used for Bio-ATF production as a sustainable alternative to Aviation Turbine Fuel.