In the first four months of the contracted supply period (December 1, 2018 to November 30, 2019), ethanol manufacturers have successfully supplied 75 crore litres (cr l) to various depots of oil companies across the country. For the first time, 21cr l, of the total supply of 75cr l, has been manufactured from ‘B’ heavy molasses/sugarcane juice/damaged foodgrains.

 

Against a requirement of 330 cr l of ethanol for 10% ethanol blending in the country, excluding J&K, the northeastern states and island territories, ethanol supply contracts have been signed for 237cr l for the ethanol supply period 2018-19 (December-November). If all the 237 cr l is successfully blended in the country in the current year, about 7.2% of petrol consumption will get substituted by this environment friendly bio-ethanol, said the Indian Sugar Mills’ Association (Isma) on Wednesday.

 

These are the highest ethanol supply contracts ever. Previously, the best ever achieved was last year, when contracts for 160 cr l were signed and 150 cr l of ethanol was supplied in the 2017-18 ethanol supply period. Average all-India ethanol blending with petrol achieved in 2017-18 was 4.22%, it added.

 

The average ethanol blending during the first four months of the current year (from December 2018 to March 2019), has been more than 8% in 10 states. It is more than 9% in Maharashtra, Uttar Pradesh and Uttarakhand.

 

Considering a bright future for the ethanol manufacturing industry and a fast expanding and increasing demand for the same, taking into account the continuous increase in petrol consumption, as well as the scope to increase the blending percentage to 20%, for which BIS standards have already been announced in July 2018, huge investments are being made to increase ethanol production capacities across the country, said Isma.

 

According to the apex sugar body, the majority of the investments are being made by the sugar companies in their attached distilleries and some investments are also being made by standalone molasses based distilleries as also grain based distilleries to manufacture ethanol and supply to the oil depots. Considering the interest of investors in the sector, the annual ethanol production capacity is expected to grow from the current 355cr l to 600-700cr l in the next two to three years. This will then allow the country to achieve over 15% ethanol blending with petrol. With the decision to start supplying 10% ethanol-blended petrol in the northeastern states and J&K, more and more ethanol-production capacities will get set up in newer regions and areas of the country.

 

Isma further said that out of total contracted ethanol supplies of 237cr l, 45cr l of ethanol have been contracted to be manufactured and supplied from ‘B’ heavy molasses and sugarcane juice, amounting to reduction of around 5 lakh tonne of sugar production. Similarly, 16.5cr l of ethanol has been contracted to be manufactured and supplied from damaged foodgrains, unfit for human consumption.

 

The new Bio-fuel Policy, 2018 has fixed a target of achieving 20% ethanol blending with petrol by 2030. Internally, the government is targeting to achieve the first milestone of 10% of ethanol blending with petrol by 2022. The new Bio-fuel Policy allows use of substances other than molasses as a feedstock to manufacture ethanol in the country. This includes sugarcane juice, damaged foodgrains, rotten potato, corn and surplus foodgrains, if any.

 

For the first time, the government had announced in July–August 2018 different prices, with a premium, for ethanol produced from ‘B’ heavy molasses and sugarcane juice (which involve sacrifice of sugar production by diverting the same into ethanol) as well as ethanol produced from damaged foodgrains.