Ethanol-making Current Affairs - 2020

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Implementation Updates: National Biofuel Policy

The Ministry of Petroleum and Natural Gas notified a new National Policy on Biofuels in June 2018. On a written reply at the opening session of Lok Sabha on November 18, 2019, the Ministry of Petroleum and Natural Gas provided its implementation steps.

Government measures and achievements

  • The percentage of Ethanol in Ethanol blended petrol has been increased from 1.53% in 2013-14 to 4.22% in 2017-18
  • GoI has procured 180 crore litres of ethanol against the target of 225 crore litres for the year 2018-19
  • The total Ethanol production capacity of the country is 355 crore litres per annum.

Current Government schemes on Biofuels

  • The Sustainable Alternative Towards Affordable scheme aims at establishing 5000 compressed bio gas plants across the country by 2023.
  • The Oil Marketing Companies that are part of the Ethanol Blended Petrol Programme can sell blended petrol with maximum ethanol percentage of 10%.

Salient Features of the Policy

  • The Biofuels will be categorized as Basic Biofuels and Advanced Biofuels.
  • Government will provide incentives, viability gap funding and off-take insurance for advanced biofuels. Advanced Biofuels are derived from non-food feedstocks. They are also known as second-generation biofuels.
  • According to the new policy, B-molasses, damaged food grains, sugarcane juice and surplus food grains can be used for ethanol production
  • A supply chain will be set up for the production of biodiesel. It is to be produced from non-edible oil seeds, short gestation crops and used cooking oil
  • The Policy defines the roles and responsibilities of all the ministries and other concerned departments that are involved in production and supply of Biodiesel.

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Government notifies ethanol-making directly from sugarcane juice, B-molasses

Union Food Ministry has notified decision to allow sugar mills to manufacture ethanol directly from sugarcane juice or an intermediate product called B-molasses. In this regard, Sugarcane Control Order, 1966 has been amended. The move would help mills divert cane juice for ethanol manufacturing during surplus years.

Key Facts

Now in case of production of ethanol directly from sugarcane juice or B-molasses, the recovery rate of sugarcane factory will be determined by considering every 600 liters so produced as equivalent to one tonne of production of sugar. Earlier, sugar mills were allowed to manufacture ethanol from by-product called C-molasses, after sugar was taken out while processing raw sugarcane juice. Molasses is also used for manufacturing spirit and alcohol among other products.

Background

Sugar mills are incurring losses as prices of sugar have fallen below production cost on account of record output of 32 million tonnes (mt) in 2017-18 season as against annual domestic demand of 25 mt. The production of ethanol directly from sugarcane juice or B-molasses will help to divert this overproduction. Sugar mills are expecting revenue realisation of over Rs 5,000 crore from sale of ethanol to OMCs during the 2017-18 sugar season (October-September). OMCs procure ethanol from sugar mills for blending with petrol. It has mandated blending of up to 10% ethanol in petrol but inadequate availability has restricted this to under 4%. Higher price for ethanol will incentivise higher ethanol production.

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