Context:
Under the Ethanol Blended Petrol (EBP) programme, the government will supply an additional 2.8 million tonnes of rice from the Food Corporation of India (FCI) buffer stocks at subsidised rates. This move aims to reduce FCI’s excess rice stockpile while supporting ethanol production.
Significance
- Energy Security: Promotes renewable fuel usage, reducing dependence on imported fossil fuels.
- Optimal Buffer Stock Utilization: FCI currently holds 61 million tonnes (MT) of rice against a buffer norm of 13.58 MT, with an economic cost of Rs 4173/quintal projected for 2025-26.
- Economic Benefits: Supports the Make in India initiative, helps double farmers’ incomes, and generates employment.
Challenges
- Food Security vs. Energy Security: Using food staples like rice, sugarcane, and maize for ethanol may threaten food and livestock feed availability.
- Inflation Risk: Higher demand for these food crops in ethanol production could increase consumer prices and reduce availability.
About Ethanol
- A biofuel produced mainly by fermenting sugars or via petrochemical processes.
- Used as a biofuel blend in petrol, a chemical solvent, and in medical disinfectants.
EBP Programme Details
- Objective: To blend ethanol in petrol, reduce import dependency, and save foreign exchange.
- Target: Achieve 20% ethanol blending by 2025-26.
- Progress: Ethanol blending increased from 1.53% in 2014 to 15% in 2024.
