Context:
After having crossed the 20% ethanol blending (E20) milestone recently, the National government is now looking to extend its attempts at further increasing ethanol in petrol. A multi-ministry committee is set to assess its feasibility and submit its report by March 2025.
What is Ethanol blending?
- It is the process of mixing ethanol with gasoline to reduce the use of fossil fuels.
What is Ethanol?
- Ethanol is a renewable biofuel that’s a byproduct of processing sugarcane, rice husk, or maize. It’s also known as ethyl alcohol.
What is Ethanol?
India’s Ethanol Program
Current Status of Ethanol Blending
- Blending capacity (Jan 2024): 17.4%
- Blending average (Feb 2024): 16%
- Expected by Oct 2025 (end of Ethanol Supply Year 2024 25): 18%
- Target for next ESY (2025 26): 20%
Next Five Year Target: 25% Blending?
- The committee has not agreed upon targets so far, though 25% ethanol blending or E25 would probably be from 2026-27.
- The technical cooperation is being worked on with Brazil.
- E100 will not feature as there are infrastructural issues as well as the efficiency to get it up.
Impact & Benefits
- Foreign Exchange Savings: ₹1.13 lakh crore saved till date by Dec 2023.
- Crude Oil Replacement: 19.3 million tonnes of crude oil replaced by ethanol. .
- Production Increase: Ethanol blending by OMCs, from 380 million liters in the year 2013-14 to 7,070 million liters in the year 2023-24.
- Distillation capacity to be increased up to 17,130 million liters per year in ethanol.
Challenges & Concerns
- Dependence on Subsidized Rice
- FCI supplies 2.4 million tonnes of subsidized rice for ethanol.
- A higher blending percentage to 25% may increase dependence on further government subsidies which is fiscally alarming.
Supply Chain Reforms
- Infrastructure for FFVs & multi feed distilleries has to expand.
- Ethanol deficient states need to have dedicated ethanol plants to maintain the balance in supply.
