Ethanol is a renewable and environment-friendly fuel that can be blended with petrol to reduce dependence on fossil fuels, promote agricultural growth, and reduce environmental pollution. In India, the Ethanol Blending Programme (EBP) has been introduced to achieve these goals, and significant progress has been made in recent years.
This article provides a comprehensive guide to understanding the Ethanol Blending Programme, its benefits, implementation, challenges, and future prospects.
What is the Ethanol Blending Programme?
The Ethanol Blending Programme (EBP) is an initiative by the Government of India to promote the use of ethanol, a renewable fuel, in petrol. The primary objectives of the EBP are to reduce the country’s dependence on imported fossil fuels, save foreign exchange, boost the domestic agriculture sector, and reduce environmental pollution.
The programme involves blending ethanol, derived mainly from sugarcane molasses, with petrol and selling it through public sector oil marketing companies (OMCs).
Benefits of Ethanol Blending
Ethanol blending offers multiple benefits, making it a crucial component of India’s energy strategy. Environmental benefits include reducing carbon emissions and pollution.
Ethanol burns cleaner than petrol, producing fewer harmful emissions that contribute to air pollution and climate change. Studies have shown that blending ethanol with petrol can reduce carbon monoxide emissions by 30-50% and hydrocarbon emissions by 20%.
Economic benefits include boosting the agriculture sector by creating a new demand for crops like sugarcane and maize used to produce ethanol. This demand helps increase farmers’ incomes and supports rural economies. Additionally, reducing oil imports saves foreign exchange, contributing to the country’s economic stability.
Benefits for consumers include potentially lower costs due to lower taxes and excise duties on ethanol. Furthermore, ethanol’s higher octane rating can enhance engine performance, reduce knocking, and improve fuel efficiency.
Indian Goals and Targets for Ethanol Blending
India has set ambitious targets for ethanol blending to achieve energy security and sustainability goals. The target of 10% ethanol blending set for the Ethanol Supply Year (ESY) 2021-22 was successfully achieved. As of June 2024, India has reached a blending level of 15%, a significant milestone indicating the programme’s success.
The National Policy on Biofuels – 2018 outlines the target of achieving 20% ethanol blending by ESY 2025-26. This target is part of the broader “Roadmap for Ethanol Blending in India 2020-25” plan.
Achieving this goal will require approximately 1016 crore litres of ethanol, replacing a substantial amount of petrol and saving about USD 4 billion annually.
Implementation of the Ethanol Blending Programme
The Indian government has taken several steps to ensure the successful implementation of the EBP. The government reintroduced the administered price mechanism to ensure fair prices for ethanol producers and a stable supply for OMCs.
Various raw materials like B heavy molasses, sugarcane juice, sugar, sugar syrup, and damaged food grains are now allowed for ethanol production, helping to increase production capacity.
The Goods and Services Tax (GST) on ethanol meant for the EBP Programme has been reduced from 18% to 5%, making ethanol production more economically viable. The government has set different prices for ethanol based on the raw material used, ensuring fair compensation for producers. For instance, the price for ethanol from C heavy molasses is Rs. 46.66 per litre, while for B heavy molasses, it is Rs. 59.08 per litre.
The EBP Programme has been extended to cover the entire country except for the Union Territories of Andaman Nicobar and Lakshadweep Islands. This ensures a uniform approach to ethanol blending across India. To address the ethanol distillation capacity constraint, the government has introduced schemes providing financial assistance to sugar mills and distilleries to enhance and augment ethanol production capacity.
Challenges Faced by the Ethanol Blending Programme
Despite the significant progress, the EBP faces several challenges that need to be addressed. Supply chain issues affect the availability and consistent supply of raw materials like sugarcane, which can be influenced by weather conditions and agricultural productivity. Low production in key states like Maharashtra and Karnataka has impacted ethanol supply.
Technological and infrastructural challenges involve ensuring efficient and high-yield ethanol production, which requires advanced technology and infrastructure. Policy and regulatory hurdles still exist, and coordinating with state governments and ensuring compliance with central regulations can be challenging. Ethanol-blended fuels require compatible vehicles, necessitating modifications to engines and fuel systems to efficiently use higher ethanol blends without damage.
Current Status and Future of the Ethanol Blending Programme
As of ESY 2023-24, India has achieved a blending level of 15%, with OMCs selling E20 (20% ethanol blended) petrol in several regions. Bharat Petroleum Corporation Limited (BPCL) recorded the highest-ever ethanol blending of 14.4% in the first quarter of 2024-25, contributing significantly to this milestone.
This achievement not only benefits the environment by significantly reducing emissions but also strengthens the agri-based economy by opening new investment opportunities and boosting farmers’ incomes.
The programme has successfully increased ethanol procurement from 38 crore litres in ESY 2013-14 to over 349 crore litres in ESY 2020-21.
The government continues to support the EBP through policies like the Long Term Ethanol Procurement Policy and financial incentives for ethanol production.
The establishment of the Global Biofuels Alliance (GBA) aims to further enhance global biofuel market uptake. The goal of 20% ethanol blending by ESY 2025-26 remains a top priority. Meeting this target will require sustained efforts to increase production capacity, diversify raw material sources, and address logistical challenges.
Conclusion
India’s Ethanol Blending Programme is a significant step towards achieving energy security, reducing environmental pollution, and supporting the agriculture sector. The programme has made remarkable progress, reaching a 15% blending level and setting the stage for future targets.
Continued government support, technological advancements, and public awareness are crucial to the programme’s success. Understanding and supporting the Ethanol Blending Programme will help India transition to a more sustainable and self-reliant energy future.