Govt advances target of blending 20% ethanol in petrol to ’25
NEW DELHI: The Union Cabinet on Wednesday approved amendments to the National Policy on Biofuels 2018, approving the advancing of the target of blending 20% ethanol in petrol by five years to 2025-26 from 2030.
Mixing petrol with ethanol, which is made from molasses, a byproduct of sugar, will help lessen the amount of oil that India imports. Ethanol can also be produced from rice and maize. India is the third-largest oil consumer and importing nation in the world after the US and China. Its crude oil import bill was US$119.2 billion in 2021-22 (April 2021 to March 2022), sharply higher than US$62.2 billion in the previous fiscal year, according to data from the oil ministry’s Petroleum Planning & Analysis Cell.
The Cabinet also allowed more feedstocks for the production of biofuels in a bid to cut India’s reliance on oil imports.
On June 5, 2021, Prime Minister
Narendra Modi had announced the advancing of the target year for 20% ethanol blending by five years to 2025. The Union food ministry has prepared a blueprint towards achieving this goal.
“Due to advancements in the field of biofuels, various decisions taken in the National Biofuel Coordination Committee (NBCC) meetings to increase biofuel production, recommendation of the Standing Committee and the decision to advance to introduce Ethanol Blended Petrol
with up to 20 per cent ethanol throughout the country from 1 April 2023, amendments are done to the National Policy on Biofuels,” according to an official statement released after the cabinet meeting. The National Policy on Biofuels 2018 was notified by the petroleum and natural gas on 4th June 2018 superseding the National Policy on Biofuels, promulgated through the Ministry of New & Renewable Energy in 2009.
The amended policy now seeks to push production of biofuels in the country through special economic zones, export oriented units under the ‘Make in India’ programme. The amended policy also allows for permission for the export of biofuels in specific cases.
“Since many more feedstocks are being allowed for production of biofuels, this will promote the Atmanirbhar Bharat and give an impetus to Prime Minister’s vision of India becoming ‘energy independent’ by 2047,” the Cabinet statement said. The plan is to gradually increase the quantity of surplus sugar to be shifted towards ethanol. The country will also sell grains, such as rice and maize, held by Food Corporation of India for the purpose, setting a nominal price for the current year at Rs 2,000 a quintal (100kg) for rice. At that price, millers can produce cheaper ethanol at Rs 56.87 a litre.
In January 2021, the Union government notified a modified scheme to incentivise ethanol production in the country, which allows sugar mills cheaper loans to set up ethanol blending units.