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India has ambitious target to mix ethanol in petrol, but supply remains a major hurdle Pipa News

Date:	12 Sep 2023

Source:	Pipa news

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News ID:	56897

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New Delhi: As part of the Global Biofuel Alliance announced on Saturday during the G20 summit, Prime Minister Narendra Modi called on countries to work together in the field of fuel blending and called for a global effort to take ethanol blending in petrol to 20 per cent. Proposed the initiative.

This has put India in the spotlight for ethanol as an alternative to fossil fuels for automobiles. But it also highlights one of the key challenges facing these efforts – the projected mismatch between demand and supply of domestically produced ethanol.

The country currently uses E10 automobile fuel – which contains 10 percent ethanol and 90 percent petrol – as fuel in vehicles. In an effort to reduce carbon emissions, the central government has reduced the target of 20 percent ethanol blending in petrol by 5 years, from 2030 to 2025.

But India’s low ethanol production and competing claims on it from other industries may pose a significant challenge to achieving this target. Currently, the country’s ethanol production is estimated at 5.42 billion liters annually, accounting for about 12 percent blending. However, to achieve its 20 per cent blending target, India is estimated to need about 10.16 billion liters annually by 2025-26, almost double the current production.

According to experts, India will need to significantly increase its production to meet its petrol blending target – said Ashim Sharma, a senior partner and group head of business performance improvement at research firm NRI (Nomura Research Institute) Consulting & Solutions. India will need to increase its ethanol production capacity to 15 billion liters to meet the target by November 2026, he told ThePrint.

This is especially important given the growing demand for petrol in India – NITI Aayog, the government’s highest advisory body on public policy, estimates the country’s petrol demand to be 50.8 billion liters by 2025-26.

Here’s a look at India’s current ethanol production levels and what needs to be done to increase it to meet targets.

Competitive claims from other industries

Most of the ethanol produced in India is from sugarcane or jaggery based, while the rest is grain based. According to government data, 38 crore liters (or about 0.38 billion litres) of ethanol were produced during 2013-14, which increased more than 10 times to 408 crore liters (4.08 billion litres) in Ethanol Supply Year (ESY) 21-22. Went.

Of the 4.08 billion liters of ethanol supplied for fuel blending in 2021-22, about 84 per cent was produced from sugarcane juice and jaggery, about 11 per cent using surplus rice from the Food Corporation of India, and the remaining 5 per cent from damaged rice. Made from grains including rice and corn from the open market.

In its 2023 report, Delhi-based agriculture think-tank Arcus Policy Research said that to produce the required 10.16 billion liters of blended ethanol from three crops – sugarcane, maize and rice – India will need about 275 million metric tonnes (MMT) of sugarcane. , 6.1 MMT of maize, and about 5.5 MMT of rice will be required.

But the auto industry is not the only industry that requires ethanol. According to the report titled Ethanol Blending of Petrol in India: Assessing Raw Material Availability, the country will require a total of 13.5 billion liters of ethanol annually by 2025-26, given the additional demand from other industries such as cosmetics, liquor and pharmaceuticals. . And this can be a challenge.

“There is no doubt that the country may struggle to meet its ethanol demand of 13.5 billion liters by 2025-26,” the report said. The report said that from efficiency and sustainability perspectives, India would do well to research alternative feedstocks to increase production.

“Furthermore, given the competition for ethanol among OMCs (oil marketing companies), beverage manufacturers and other industries, at least consideration of the feasibility of imported ethanol for purposes other than fuel-blending is necessary,” the report said. need to.”

According to the report, there are two major challenges to meeting the E20 target over the next two years: competing demand from other ethanol consuming sectors such as potable alcohol “which is growing at double digit rates”, and competition for grains such as corn. .

According to the report, the country’s poultry industry, which has a competitive claim on grains such as maize, has “showed impressive growth” and will continue to require more maize as feed.

The report asked, “Agricultural yields of crops including paddy, maize, cotton and chilli have also been affected by weather and climate change. Therefore, the big question is: Does India have the capacity to supply sufficient quantities of ethanol to its oil marketing companies (OMCs) to meet the targeted mandate of E20 by 2025-26?”

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