New Delhi: Minister of State (MoS) for Petroleum and Natural Gas Rameswar Teli told the Lok Sabha on Monday that ethanol blending with petrol has reached 7.93 percent in India. In a written response submitted in the Lok Sabha, Teli said, "Government has undertaken several supply and demand side interventions since 2014 which has enabled improvement in ethanol blending from average 1.53 percent during Ethanol Supply Year (ESY) 2013-14 to 7.93 percent during ongoing ESY 2020-21 as on 12th July, 2021." In an attempt to cut its increasing crude oil import bill, the Centre has placed a lot of policy thrust on the development of bio-fuels.
The news comes as India has advanced the target for achieving 20 percent ethanol blending in petrol by two years to 2023. In a notification published in the official gazette on June 3, the Ministry of Petroleum and Natural Gas said, "… the Central Government hereby directs that the Oil Companies shall sell Ethanol Blended Petrol with percentage of ethanol up to twenty per cent as per the Bureau of Indian Standards specifications, in the whole of the States and union territories."
The E-100 pilot projects launched recently at Pune city by Public Sector Oil Marketing Companies (OMCs) on June 5. With a view to enhance fuel choice and facilitate sale of E-100 fuel, the Petroleum Ministry, in an order dated March 22 amended the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 by permitting the direct sale of Bio-ethanol (E100) by an oil company for use as standalone fuel or blending with motor spirit, for compatible automobiles to all consumers, in accordance with the standards specified by the Bureau of Indian Standards.
The government's optimism in advancing the target stems primarily from the increased availability of ethanol in the country. This has happened due to the government's decision to allow production of ethanol from surplus rice with Food Corporation of India (FCI) and maize. Earlier, ethanol was being produced only from C-heavy molasses from the sugar industry.
A tender floated by the Oil Marketing Companies (OMCs) for 195 crore litres of ethanol in November 2020 received an overwhelming response as bids were received for 320 crore litres of ethanol. This was the first ethanol procurement tender floated by the oil PSUs after the government allowed production of ethanol from maize.
On December 30, 2020, the Union Cabinet approved the expansion of interest subvention scheme to provide financial assistance for enhancement of ethanol distillation capacity from grain-based distilleries along with molasses-based distilleries. The total outlay under the interest subvention scheme is Rs 8,460 cr. The expanded interest subvention scheme is expected to fuel investment of about Rs 40,120 crore in the ethanol value chain for making ethanol available for blending with petrol.
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