Ethanol Current Affairs - 2020

Indian Oil to set up new 2G Ethanol Plant in Panipat

The Indian Oil Corporation recently received environment clearance from Ministry of EFoCC (Environment, Forest and Climate Change), to set up a new 2G Ethanol plant at Panipat. Indian Oil will invest Rs 766 crore in setting up the plant.

Highlights

  • The Ethanol produced in the plant will be exclusively used to blend transportation fuels
  • The project also aims at doubling farmers income

Significance

The Government is trying in every way to reduce the dependence on petroleum products like petrol and diesel. The GoI recently notified that no Environmental Clearance is required for sugar mills to produce more ethanol from sugarcane juice.

Ethanol as Fuel

Ethanol is most often used as motor fuel. It is predominantly used as a biofuel additive for gasoline. Brazil was the first country to produce Ethanol run car (the first ethanol run vehicle in the world) in 1978.

Ethanol in India

India initiated the use of Ethanol as a fuel in 2003. India began its journey with E5 fuel which uses 5% Ethanol and 95% diesel. In 2006, India began its second phase of E10 biofuel which consists of 10% Ethanol and 90% Diesel.

India is yet to launch E15 officially. However, the E15 outlets have grown from 180 in the year 2016 to 394.

Indian Government has set a target of 22.5%. In November, 2019, IOCL, HPCL and BPCL announced that they are investing 586 million USD to achieve the target. Around 7 ethanol producing units will be launched according to the plan.

While other countries have entered E100, India is just putting its baby steps towards biofuel. However, the potential is huge. According to IEA (International Energy Agency), around 25% of world energy demand will come via India in 2040.

CCEA hikes ethanol procurement price for fuel blending

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has given its approval to increase price of ethanol procured by public sector oil marketing companies (OMCs) for one year starting December 2019. It also increased price of ethanol derived from C heavy molasses from Rs 43.46 a litre to Rs 43.75 per litre, and for B heavy molasses to Rs 54.27 per litre from Rs 52.43 earlier. It also has fixed price of ethanol from sugar, sugarcane juice, sugar syrup route at Rs 59.48 per litre. The increased prices have been approved for the forthcoming 2019-20 sugar season and will be applicable from 1 December 2019 to 30 November 2020.

Background

Union Government is implementing Ethanol Blended Petrol (EBP) Programme wherein Oil Marketing Companies (OMCs) sell petrol blended with ethanol up to 10%. This programme was extended to whole of India except UTs of Andaman Nicobar and Lakshadweep islands with effect from April 2019 to promote use of alternative and environment friendly fuels. This intervention also seeks to give boost to agriculture sector and reduce import dependence for energy requirements.

Government had notified administered price of ethanol since 2014 and since 2018 Government for first time announced differential price of ethanol based on raw material for ethanol production. These decisions have significantly improved supply of ethanol and also ethanol procurement by Public Sector OMCs has increased from 38 crore litre in ethanol supply year 2013-14 to estimated over 200 crore litre in 2018-19. Government has taken multiple steps to limit sugar production in the Country and to increase domestic production of ethanol. These steps include allowing diversion of B heavy molasses and sugarcane juice for ethanol production.