Ethanol Blended Petrol Programme Current Affairs - 2020

First Meeting of Consultative Committee of Ministry of Petroleum

The first meeting of Consultative Committee of Ministry of Petroleum was chaired by the Minister of Petroleum Shri Dharmendra Pradhan.

Highlights of the meet

The committee announced that Government of India is working towards a transformative change in energy sector. It is planning to increase share of Natural gas in the energy sector from 6.2% to 15% by 2030. The committee has given a strong policy thrust to support Natural Gas enabling infrastructure.

Also, the contribution of biofuels and its usage are to be increased. The committee pointed out already existed government measures to increase the use of biofuels

Government measures of Biofuels

GoI introduced Ethanol Blended Programme to reduce dependency of oi imports, address environmental concerns and to boost agriculture sector. Government re-introduced administered price mechanism, amended Industries (Development and Regulation) act, 1951, reduced GST rates of ethanol from 18% to 5%.

Current Scenario

Today in India, oil public sector units like Indian Oil Corporation are establishing Ethanol bio-refineries. Around 12 such refineries in 11 states are being established. Currently, the biofuels are produced in accordance with National Biofuel Policy, 2018. It targets 5% blending of biodiesel in diesel by 2030. Under SATAT (Sustainable Alternative Towards Affordable Transportation), 5000 Compressed Bio Gas Plants are to constructed by 2023. The initiative aims at generating 15 million metric tonnes of biogas per annum

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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.

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