India has been progressively implementing an ethanol policy to promote the use of biofuels. The policy provides for the usage of multiple feedstocks including grains, thereby giving flexibility to the mills and better capacity utilisation of distilleries.
The policy of introducing 20% ethanol is expected to take effect from April 1, 2023. The aim is to reduce import dependency on fuel, save foreign exchange, address environmental issues and give a boost to the domestic agriculture sector.
The government has been promoting the use of ethanol as a fuel for several reasons. Firstly, it is a renewable source of energy, which means it can be produced again and again without depleting the earth’s resources. Secondly, it helps in reducing the emission of greenhouse gases, thus contributing to the fight against climate change. Thirdly, it provides a market for surplus agricultural produce, thereby benefiting the farmers.
The government has set a target of blending 20% ethanol with petrol by 2023. This is a significant increase from the current blending level of around 5%. To achieve this target, the government has been encouraging the setting up of new ethanol production facilities and the expansion of existing ones. It has also been providing financial incentives to ethanol producers.
Total Ethanol Production in India
India’s current ethanol production capacity stands at around 9.5 billion litres. Sugarcane feedstock produces 6.2 billion litres of this, while grain feedstock produces 3.3 billion litres. In 2022, the production of ethanol used as a fuel in India amounted to approximately 5.3 billion litres.
The production of ethanol in India has been increasing over the years due to the government’s push for biofuels. The expansion of existing distilleries and the setting up of new ones have made the increase in production possible. The government has been providing financial incentives to ethanol producers to encourage them to increase production.
The production of ethanol has a significant impact on the Indian economy. It provides a market for surplus agricultural produce, thereby benefiting the farmers. It also creates job opportunities in rural areas, where most of the ethanol production facilities are located.
Ethanol Production Target for 2025
The government of India has set an ambitious target to produce ethanol by the year 2025. The aim is to blend 20% ethanol with petrol, creating what is known as E20 fuel. The government advanced this target from the previously set year of 2030.
To achieve the E20 goal, India will be required to meet an ethanol production target of 1,014 crore litres by 2025. This is a significant increase from the current production level of around 9.5 billion litres. The expansion of existing distilleries and the setting up of new ones will make the increase in production possible.
The achievement of the E20 target will have several benefits for India. Firstly, it will reduce the country’s dependence on imported crude oil, thus saving valuable foreign exchange. Secondly, it will help in reducing the emission of greenhouse gases, thus contributing to the fight against climate change. Thirdly, it will provide a market for surplus agricultural produce, thereby benefiting the farmers.
Operational Ethanol Distilleries in India
India has several operational ethanol distilleries with significant production capacities. Here are some of the major players in the Indian ethanol market:
- Bajaj Hindusthan Sugar Limited: One of the largest sugar companies in India, it has 14 sugar plants in Uttar Pradesh with a significant ethanol production capacity.
- Balrampur Chini Mills Limited: It is the second-largest sugar manufacturing company in India with 10 factories in Uttar Pradesh. Balrampur Chini Mills has an annual production capacity of 76,500 kiloliters of ethanol.
- Triveni Engineering & Industries Ltd: Triveni operates seven sugar mills in Uttar Pradesh and has an ethanol production capacity of 160,000 kiloliters per annum.
- Dhampur Sugar Mills Limited: Dhampur has five sugar mills in Uttar Pradesh, and its distillery in Dhampur has a capacity of 300,000 kiloliters per annum.
- Dalmia Bharat Sugar and Industries Limited: Dalmia has four sugar mills in Uttar Pradesh and Maharashtra. It has an ethanol production capacity of 130,000 kiloliters per annum.
- Shree Renuka Sugars Limited: Shree Renuka Sugars operates 11 mills globally, with a total crushing capacity of 20.7 million metric tonnes per annum. Its ethanol production capacity is 900,000 kiloliters per annum.
Upcoming Ethanol Projects in India
The Indian government is actively promoting the establishment of new ethanol production facilities to meet the ambitious E20 target by 2025. Several new projects are in the pipeline, which are expected to increase India’s ethanol production capacity significantly.
India’s Food Ministry has in principle approved 11 more ethanol projects under the new Ethanol Interest Subvention Schemes. These projects are likely to add a capacity of 47 crore litres of ethanol and attract an investment of Rs. 1,310 crore.
10 of the 11 projects are grain-based and one project uses dual feedstock. The grain-based projects will likely use raw materials such as rice, wheat, and corn, whereas the dual feedstock project will use both grain and non-grain materials.
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