- India’s ethanol-blending program aims to enhance sustainability, energy security, and reduce carbon emissions.
- Challenges include feedstock shortages, water-intensive production, and supply chain inefficiencies.
Key Points
Ethanol Blending Definition
- Ethanol Blending: Mixing ethanol (biofuel) with petrol for cleaner fuel, reducing fossil fuel dependence and carbon emissions.
- Primary Sources: Sugarcane molasses, maize, rice, and other biomass.
Government Initiatives
- Ethanol Blended Petrol (EBP) Programme: Launched in 2003 to promote ethanol in transport fuels.
- Key Schemes:
- PM-JI-VAN Yojana: Supports second-generation ethanol from agricultural waste.
- National Bio-Energy Programme: Promotes sustainable energy through biofuels.
- Interest Subvention Scheme: Financial support for ethanol plant setup.
- GST Reduction: Ethanol for EBP taxed at 5%.
Current Status
- Blending Targets: Achieved 10% blending by 2022; aiming for 20% (E20) by 2025.
- Current Blending Rate: 15% as of 2024.
Benefits of Ethanol Blending
- Energy Security: Reduces dependence on imported crude oil (over 87% of needs).
- Saved ₹1.1 trillion in foreign exchange and replaced 181 lakh metric tonnes of crude oil (2014-2024).
- Reduction in Carbon Emissions:
- Lower vehicular emissions, improving urban air quality.
- Cut CO₂ emissions by 544 lakh metric tonnes since 2014.
- Economic Growth:
- Boosts rural economy; ₹87,558 crore disbursed to farmers.
- Additional income from biofuel crops.
- Diversification of Cropping:
- Encourages sustainable agriculture by shifting from water-intensive crops.
- Foreign Investment:
- ₹40,000 crore in new investments; positions India as a leader in ethanol trade.
Key Challenges
- Water-Intensive Production:
- Heavy reliance on sugarcane exacerbates water stress.
- Food Security Risks:
- Diversion of food grains for fuel could raise prices and threaten food security.
- Infrastructure Limitations:
- Inadequate production and distribution facilities hinder meeting blending targets.
- Technological and Compatibility Issues:
- Existing vehicles designed for E10 fuel; adaptations needed for E20.
- Price Volatility:
- Fluctuating prices of raw materials affect profitability and investment stability.
Measures for Improvement
- Feedstock Diversification:
- Promote alternative crops like maize and sorghum.
- Decentralized Production:
- Support small-scale distilleries linked to local farmers.
- Enhancing Vehicle Compatibility:
- Develop incentives for retrofitting older vehicles.
- Pricing Stability:
- Establish an Ethanol Price Stabilization Fund to mitigate price fluctuations.
- Investment Encouragement:
- Create an Ethanol Infrastructure Development Fund for private sector participation.
Way Forward
India’s ethanol-blending initiative has the potential to enhance energy security, reduce emissions, and boost rural economies. Addressing challenges through policy support and technological advancements is critical for achieving the 20% blending target by 2025.