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ETHANOL BLENDING IN INDIA

25th July, 2023

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Context

  • India's ethanol production program has seen significant progress in the last five years.
  • Quantities supplied by sugar mills/distilleries to oil marketing companies (OMCs) have increased substantially.
  • The program has diversified its raw material sources from cane molasses and juice to rice, damaged grains, maize, and millets.

Details

Ethanol and its Blending

  • Ethanol is a high-purity alcohol that can be blended with petrol for fuel purposes.
  • It differs from rectified spirit (94%) used in industries and extra neutral alcohol (96%) for potable liquor.

PM Modi's Announcement

  • Prime Minister Narendra Modi announced that India has achieved 20% ethanol-blended petrol and aims for nationwide coverage by 2025.
  • This move is part of India's efforts to promote ethanol as an eco-friendly and renewable fuel.

Cane Options and Ethanol Production

  • Sugar mills traditionally produced ethanol from 'C-heavy' molasses, containing around 40-45% sugar.
  • Mills can optimize sugar extraction to produce ethanol from 'B-heavy' molasses (50%-plus sugar) or ferment the entire cane's fermentable sugars into ethanol.

Diversification of Feedstocks

  • Ethanol supplies have surged from 38 crore liters in 2013-14 to an estimated 559 crore liters in 2022-23.
  • Feedstocks have diversified, including B-heavy molasses, direct sugarcane juice, rice, maize, and other foodgrains.

Ethanol Yields from Grains

  • Ethanol yields from grains are higher than from molasses.
  • Rice (450-480 liters/tonne), broken/damaged grains (450-460 liters/tonne), maize (380-400 liters/tonne), jowar (385-400 liters/tonne), and millets (365-380 liters/tonne) contribute to higher ethanol production.

Challenges in Grain Ethanol Production

  • Ethanol production from grains involves a longer process of converting starch into sucrose and simpler sugars before fermentation.
  • Molasses already contain sugars and are more straightforward to convert into ethanol.

Year-round Production with Multiple Feedstocks

  • Leading sugar companies have installed distilleries that can operate on multiple feedstocks, enabling year-round production.
  • This flexibility ensures a consistent ethanol supply throughout the year.

Differential Pricing Policy

  • The government's policy of differential pricing incentivizes the use of various feedstocks by fixing higher prices for ethanol produced from B-heavy molasses and sugarcane juice/syrup.
  • This compensates mills for reduced sugar production.

Boost in Ethanol Blending

  • The policy boost has resulted in a significant increase in ethanol blending with petrol, reaching 11.75% in 2022-23 compared to 1.6% in 2013-14.

New Demand for Grains

  • The incorporation of new feedstocks can create additional demand for grains like rice, barley, and millets.
  • States like Uttar Pradesh and Bihar, known for sugarcane and maize, respectively, can contribute to "fueling India" with ethanol.

Byproduct Benefits

  • Molasses-based distilleries have multi-effect evaporator (MEE) units that help in treating liquid effluent (spent wash).
  • The concentrated wash can be used as boiler fuel, and the ash contains potash suitable for fertilizers.
  • Grain distilleries produce distillers' dried grain with solubles (DDGS), a valuable animal feed product.

Biofuel

Definition

  • Biofuels are renewable fuels derived from organic materials, such as plants and animal waste, rather than fossil fuels like coal, oil, and natural gas.
  • They are considered a greener alternative to conventional fuels because they reduce greenhouse gas emissions and promote sustainability.

Purpose

  • The main purpose of biofuels is to provide a cleaner and more sustainable source of energy to replace fossil fuels, which contribute significantly to climate change and environmental degradation.
  • Biofuels also aim to reduce the dependence on imported oil and enhance energy security.

Types of Biofuels

  • Ethanol: Produced from fermenting sugars and starches found in crops like corn, sugarcane, and wheat.
  • Biodiesel: Made from vegetable oils, animal fats, or recycled cooking oil through a chemical process called transesterification.
  • Biogas: Generated from the anaerobic decomposition of organic matter, such as agricultural waste, sewage, and landfill gas.
  • Bioethanol: Derived from cellulosic biomass, such as wood, grasses, and agricultural residues, using advanced technologies.

Ethanol Blending

Meaning

  • Ethanol blending refers to the practice of mixing a certain percentage of ethanol with conventional gasoline or petrol to create blended fuels.
  • It is an effective way to reduce greenhouse gas emissions, improve air quality, and promote renewable energy usage in the transportation sector.

How it is done?

  • Ethanol blending is achieved by mixing ethanol with gasoline in specific proportions.
  • The most common blend is E10, which contains 10% ethanol and 90% gasoline.
  • Blends like E15 (15% ethanol), E85 (85% ethanol), etc., are also used in certain regions depending on the suitability of vehicle engines.

Different Generations of Biofuels

  • First Generation Biofuels
    • Derived from food crops, such as sugarcane, corn, soybeans, and vegetable oils.
    • Widely used and easily available, but criticized for potential competition with food production.
    • Examples: Biodiesel, bioethanol, and vegetable oil-based fuels.
  • Second Generation Biofuels
    • Produced from non-food feedstocks like agricultural residues, woody biomass, and waste materials.
    • Address concerns about food competition and offer more sustainable options.
    • Examples: Cellulosic ethanol, biobutanol, and biofuels from algae.
  • Third Generation Biofuels
    • Focus on using microorganisms and algae to convert sunlight into biofuels through photosynthesis.
    • Highly efficient in terms of land use and resource utilization.
    • Examples: Algal biofuels and cyanobacterial biofuels.
  • Fourth Generation Biofuels
    • Utilize advanced technologies to engineer microorganisms for biofuel production.
    • Aim for higher yields and cost-effectiveness compared to previous generations.
    • Examples: Synthetic biology-based biofuels and genetically engineered biofuels.

Ethanol Blended Petrol (EBP) Programme

Implementation Scope

  • The EBP Programme is implemented across India, except in the Union Territories of Andaman Nicobar and Lakshadweep islands.
  • Oil Marketing Companies (OMCs) sell petrol blended with 10% ethanol to promote eco-friendly and renewable fuel.

Government Interventions for Increased Ethanol Production

  • Since 2014, the government has taken multiple measures to boost indigenous ethanol production.
  • These interventions include reintroducing the administered price mechanism, opening alternate routes for ethanol production, amending the Industries (Development & Regulation) Act for smooth ethanol movement, reducing GST on ethanol for EBP, differential pricing based on raw material, extending EBP nationwide, and interest subvention schemes.

Expanded Raw Materials for Ethanol Production

  • In 2018-19, the EBP Programme allowed new raw materials for ethanol production, including B heavy molasses, sugarcane juice, sugar, sugar syrup, and damaged food grains (unfit for human consumption) like wheat and rice.
  • Different ex-mill prices of ethanol were fixed based on the raw material used.

Increase in Ethanol Procurement

  • The government's actions led to a significant increase in ethanol procurement by PSU OMCs.
  • Ethanol procurement increased from 38 crore litres in ESY 2013-14 to 188.6 crore litres in ESY 2018-19, achieving an average blend percentage of 5.00% in ESY 2018-19.

Addressing Ethanol Distillation Capacity Constraint

  • To achieve the target of 20% by 2030, the government identified a constraint in available ethanol distillation capacity.
  • The Department of Food and Public Distribution (DFPD) introduced a Scheme to extend financial assistance to sugar mills for enhancing and augmenting ethanol production capacity.

Long Term Ethanol Procurement Policy

  • The Ministry of Petroleum and Natural Gas (MoP&NG) issued a Long Term Ethanol Procurement Policy under the EBP Programme on 11th October 2019 to provide a strategic roadmap for achieving higher ethanol blending in petrol.

PRACTICE QUESTION

Q. How has the government's intervention and policy measures contributed to the increase in ethanol production? (150 Words)

https://indianexpress.com/article/explained/explained-economics/the-ethanol-impetus-8856449/

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