Addressing the World Environment Day event on Saturday, Prime Minister Narendra Modi said the government has resolved to meet the target of 20% ethanol blending in petrol by 2025. Earlier the target was set for 2030.
Modi also released the ‘Report of the Expert Committee on Road Map for ethanol blending in India 2020-2025’. Currently, ethanol blending level in petrol is around 8.5%. Under the Ethanol Blended Petrol (EBP) programme, the government has already reintroduced the administered price mechanism for ethanol procurement, allowing ethanol production from multiple feedstocks like heavy molasses, sugarcane juice, sugar, sugar syrup, damaged food grains, maize and surplus rice stocks with Food Corporation of India (FCI).
The theme for this year’s event was ‘promotion of biofuels for a better environment’, and the Prime Minister was accompanied by Union cabinet ministers Nitin Gadkari, Narendra Singh Tomar, Prakash Javadekar, Piyush Goyal and Dharmendra Pradhan.
Stating that “ethanol has become one of the major priorities of 21st century India,” Modi added that “the focus on ethanol is having a better impact on the environment as well as on the lives of farmers”. State-run oil marketing companies received 66.5 crore litres of ethanol in Ethanol Supply Year 2016-17 (December, 2016 – November, 2017), which increased to 173 crore litre in supply year 2019-20.
The government has already directed oil CPSEs to set up second generation (2G) ethanol bio-refineries in different parts of the country using agri-residues and biomass. OMCs are in the process of setting up twelve 2G bio-refineries with an investment of Rs 14,000 crore.
“A lot of emphasis is being laid on building the necessary infrastructure for the production and purchase of ethanol in the country,” Modi said. As per the department of food and public distribution, the total production capacity of alcohol and ethanol in the country is 684 crore litres per annum. Ethanol procured under EBP programme falls in the 5% GST slab.
The EBP programme aims is to address environmental concerns, reduce oil import bill and provide remunerative income to farmers.
The procurement price of ethanol for current Ethanol Supply Year 2O2O-21 is Rs 62.65/litre for sugarcane juice, Rs 51.55/litre for damaged food grains, Rs 56.87/litre for rice available with FCI, Rs 51.55/litre for maize and for heavy molasses it is in the range of Rs 45.69/litre and Rs 57.61/litre.
The sugar mills and distilleries are free to set up ethanol plants after obtaining statutory clearances and the government has already notified an interest subvention scheme to assist setting up of these plants.