Grain-based ethanol manufacturers have demanded that the Centre follow dual pricing for the products made from maize and rice due to difference in realisation, potentially helping the government’s crop diversification plan.

“Similar to the sugarcane-based ethanol plants, the government should have differential pricing for all grain-based plants and additional incentives for those who use maize,” said an industry official. The recovery rate from maize to ethanol is 385 litres per tonne, whereas it is about 440 litres per tonne in case of rice, the official said. Oil marketing companies (OMCs) are offering to buy at ₹52.90/litre from grain-based ethanol plants, whereas they buy in three price bands from sugar mills, said the owner of a ethanol plant. The government should offer to buy at ₹55/litre from those who are using maize as feedstock, he said.

Ex-mill prices

The ex-mill price of ethanol fixed by the government for C heavy molasses is ₹46.66/litre; for B heavy molasses, it is ₹59.08/litre and ₹63.45/litre for sugarcane juice/sugar/sugar syrup for Ethanol Supply Year 2021-22 (ESY December-November). The GST and transportation costs are also reimbursed to the suppliers of ethanol.

So far, 196 projects with a combined capacity to annually produce 859.11 crore litres of ethanol from grains like rice and maize have been approved by Union Food Ministry since January 2021. Currently, the country has 116 grain-based ethanol plants with an installed capacity of 268 crore litres.

The government has also authorised OMCs to decide the pricing for Second Generation (2G) ethanol and they are also setting up such bio refineries at different places -- Panipat in Haryana, Bathinda in Punjab, Bargarh in Odisha, Numaligarh in Assam and Devangere in Karnataka.