Ethanol Blending Current Affairs

India’s first 2G Ethanol Bio-refinery to be set up in Punjab

The foundation stone of India’s first 2G (Second Generation) Ethanol Bio-refinery was laid at Tarkhanwala village in Bathinda, Punjab.

 Central Government Public Sector Undertaking (CPSU) Hindustan Petroleum Corporation Limited (HPCL) is setting up this project at a cost of 600 crore Rupees.

Key Facts
  • HPCL’s bio-refinery will produce 100 kilolitres of ethanol per day i.e. 3.20 crore litres per annum from agricultural residues.
  • It will be sufficient to meet the 26% of the ethanol blending requirement of Punjab. It will also produce about 30,000 tonnes of bio-fertiliser per annum to enhance soil nutrients.
  • It will also produce more than 1 lakh kilograms of Bio-CNG per annum which can cater to transport and clean cooking requirements.
  • It will generate employment for about 1,200-1,300 persons in the biomass supply chain. It will also generate an additional income of approximately 20 crore Rupees per annum for farmers through purchase of their agriculture residues.
  • The project will also significantly help in reducing CO2 emissions from the paddy straw which currently is being burnt after harvesting.

HPCL and other state-run oil firms are planning to set up 12 2G ethanol bio-refineries across 11 states at an estimated cost of 10,000 crore Rupees. These Bio-refineries will be significantly contributing towards the Ethanol Blending Programme (EBP) for achieving 10% Ethanol Blending in Petrol from current 5% by producing around 35-40 crore litres of ethanol annually. Read more

About 2nd generation ethanol

2nd generation ethanol is a fuel that can be manufactured from various types of biomass. Whereas 1st generation ethanol is made from the sugars and vegetable oils found in arable crops, which can be easily extracted using conventional technology. In comparison, 2nd generation ethanol is made from lignocellulosic biomass or woody crops, agricultural residues or waste, which makes it harder to extract the required fuel using conventional technology.


CCEA approves revision of ethanol price for supply to Public Sector OMCs

The Cabinet Committee on Economic Affairs (CCEA) has approved the mechanism for revision of ethanol price for supply to Public Sector Oil Marketing Companies (OMCs).

The revised administered price will facilitate OMCs to carry out the Ethanol Blended Petrol (EBP) Programme for the next sugar season 2016-17.

Key facts

  • The revision of ethanol prices will facilitate continuation of Government policy in providing price stability and remunerative prices for ethanol suppliers.
  • Charges will be paid to the ethanol suppliers as per actuals in case of Excise Duty and GST/ VAT and transportation charges as decided by the OMCs.
  • However, these prices of ethanol can be reviewed and suitably revised by Central Government at any time during ethanol supply period (from 1 December, 2016 to 30 November, 2017) depending upon prevailing economic situation and other relevant factors.


  • The Ethanol Blended Petrol (EBP) Programme was launched by the Central Government in 2003 to promote the use of alternative and environment friendly fuels.
  • It was intervention sought to reduce import dependency for energy requirements and environment friendly measure to reduce vehicular pollution.
  • However, since 2006, OMCs were not able to meet required quantity of ethanol demand against the tenders floated by them. The various constraints for it were like State Specific issues, Supplier related issues including Pricing issues of ethanol.
  • In order to augment the supply of ethanol, a new mechanism for pricing of ethanol was placed in where Government decided delivered price of ethanol at OMC depots. The decision has helped in significantly improving the supply of ethanol.

What is Ethanol Blending?

  • The ethanol blending is process of mixing petrol with ethanol. The mixture is called as Ethanol Fuel / Gasohol which is considered as a quasi-renewable energy.
  • Ethanol is biofuel derived from Sugarcane molasses (by-product in the conversion of sugarcane to sugar), corn, sorghum etc.
  • In India, practice of blending ethanol was started in 2001. Ethanol blending for first time was mention in the Auto fuel policy of 2003.
  • Later, the National Policy on Bio-fuels, 2009 made mandatory for oil companies to sell petrol blended with at least 5% of ethanol.

Benefits of ethanol blending

  • It reduces the vehicular emissions especially carbon monoxide emissions.
  • It is cheaper than petrol as it is cheaper to manufacture.
  • It decreases a nation dependence on foreign oil.
  • Ethanol has a higher octane rating than ethanol-free petrol.
  • In case of India, ethanol production can give higher sugarcane price for farmers which can help in rural prosperity.