The Centre targets to achieve 20% blending with petrol by 2025.
NEW DELHI, Apr 22 (The CONNECT) – The Government has decided to open a window for six months for inviting fresh applications from project proponents with land and environmental clearances to set up new distilleries or expansion of existing distilleries to produce 1-G ethanol.
This step has been taken in order to enhance ethanol production capacities in the country and to achieve 20% blending with petrol by 2025.
This is also being done to ensure that only serious project proponents are issued in-principle approval by the Department of Food and Public Distribution (DFPD), the window has been opened for inviting fresh applications from those project proponents who have acquired land for project and obtained environmental clearance.
The Government explained that the decision will facilitate sugar mills to set up new distilleries or expand their existing distilleries and thereby help in diverting excess sugarcane and sugar to ethanol.
New grain-based distilleries would come up in deficit states like north-eastern states, southern states like Tamil Nadu, Andhra Pradesh, Telangana and states such as Bihar and Madhya Pradesh.
Ethanol distillation capacity of molasses-based distilleries was only 215 cr litre prior to 2014.
However, in past 7 years due to the policy changes made by the Centre, the capacity of molasses-based distilleries has increased by one and a half times and is currently at 569 cr litre. Capacity of grain-based distilleries which were 206 cr litre in 2013 increased to 280 cr litre. Thus, the total ethanol production capacity in the country has reached to 849 cr litre.
Ethanol production capacities are, however, required to be enhanced to about 1700 cr litre to achieve the target of 20% blending by 2025. Opening of window would help in augmentation of ethanol production capacities, the government said.
Till the year 2013, supply of ethanol to Oil Marketing Companies (OMCs) was only 38 cr litre with blending levels of only 1.53 % in ethanol supply year (ESY) 2013-14. Production of fuel grade ethanol and its supply to OMCs has increased by 8 times from 2013-14 to 2020-21.
In ESY 2020-21, the country touched a historically high figure of about 302.30 cr litre thereby achieving 8.10% blending. In the current ESY 2021-22, about 158 cr litre ethanol have been blended with petrol till 17.04.2022 thereby achieving 9.77% blending. It is expected that in current ethanol supply year 2021-22, we will be achieving 10% blending target.
The Government has fixed the target of 10% blending of fuel grade ethanol with petrol by 2022 and 20% mix by 2025 with the vision to boost agricultural economy, reduce dependence on imported fossil fuel, save foreign exchange on account of crude oil import bill and to reduce the air pollution,
The Government is extending financial assistance in the form of interest subvention @ 6% per annum or 50% of rate of interest charged by banks, whichever is lower, on the loans to be extended by banks for five years including one-year moratorium.