Ethanol Blending in IndiaBottom of Form

The Food Ministry has allowed ethanol producers to participate in the Open Market Sale Scheme of rice from August to October 2024.

• Additionally, it has permitted the use of sugarcane juice, sugar syrup, B-heavy molasses, and C-heavy molasses for ethanol production during the 2024-2025 period, reversing last year’s ban.

Reasons behind the recent order

• Managing Excess Stock: India holds surplus rice stocks exceeding 540 lakh tonnes.
• Boosting Renewable Energy: By enhancing ethanol production, the order contributes to India’s energy security and self-reliance through increased renewable energy usage.
• Economic Stability: The reversal of the ban ensures better utilization of agricultural by-products without disrupting sugar availability for domestic consumption.

About Ethanol Blending:

• Definition: Ethanol is a biofuel produced from organic matter, primarily sugarcane in India, through fermentation. It is high in oxygen content, allowing for more thorough combustion in engines.
• Environmental Impact: Ethanol blending reduces vehicular emissions, including carbon monoxide (CO), hydrocarbons (HC), and nitrogen oxides (NOx). E20 fuel, which has a 20% ethanol blend, can lower CO emissions by 50% in two-wheelers and 30% in four-wheelers.

Ethanol Blending Program

• Objective: To blend ethanol with petrol to reduce import dependence, save foreign exchange, and improve energy security.
• Target: Achieve 20% ethanol blending (E20) by 2025-2026.
• Current Status: As of 2022-2023, over 500 crore liters of ethanol have been blended with petrol, with a current blending rate exceeding 15%.

Challenges

• Producers: Issues with feedstock availability and weather-related challenges.
• Oil Marketing Companies: High costs for additional storage tanks, logistics, and emissions management.
• Vehicle Manufacturers: Need to optimize engines for higher ethanol blends and conduct durability studies and field trials.
• Limited Sugarcane Availability: Diverting land for sugarcane production could stress other crops and impact food prices.
• Water Footprint: High water usage for ethanol production, especially from non-rainwater sources, poses a sustainability challenge.

Key Initiatives

• National Policy on Biofuels (2018): Provides a framework for promoting biofuels in India.
• Reduced GST on Ethanol: From 18% to 5% for the Ethanol Blending Program.
• Legal Amendments: Changes to the Industries (Development & Regulation) Act, 1951, to facilitate the smooth movement of ethanol across the country.

Way Forward

• Encouraging Water-Saving Crops: Promote ethanol production from crops like maize that require less water.
• Production from Non-Food Feedstock: To prevent a trade-off with food security, focus on producing ethanol from non-food sources.
• Clustering of Ethanol Distilleries: Establish distilleries in clusters and ensure effective transfer of ethanol from surplus to deficit states.
• Expanding Alternatives: Focus on improving the capacity of biorefineries to use crop residue and explore commercially viable biofuels like Jatropha.

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