CII (Confederation of Indian Industry) held a webinar titled “Ethanol Roadmap for 2025” on April 22, 2022, and sponsored the GPS Renewables webinar. The ‘Ethanol Roadmap for 2025’ webinar highlighted the market opportunity of 1G Ethanol projects to meet 20% of India’s target of ethanol blending with gasoline by 2025.
The webinar focused on key aspects such as debt financing and feedstock availability challenges, project risks like input, tech and output, technology readiness, and government policies. Below are the key takeaways from the webinar:
1. Dedicated Portal for Ethanol Projects for Serious Project Proponents
Sangeet Singla, Chief Director (Sugar), Department of Food and Public Distribution Director at the Department of Food and Public Distribution announced, “In collaboration with the National Single Window Portal System, we are going to launch a dedicated portal for Ethanol projects. This will be a portal where project proponents can access all the information on one platform. All existing distillers and new ones must register at the portal www.nsws.gov.in and it will provide information about all the approvals that are required. This will be open from Monday onwards and project proponents can apply for the new window. The new window will last for about six months and we do not want any non-serious project proponents to apply. If proponents are not able to execute within the projects within 1 to 1.5 years then it becomes difficult to achieve 20% of our target by blending ethanol 2025 ”
2. Addressing Concerns Around Ethanol Production Leading to Food Shortage
Sangeet Singla, Chief Director (Sugar), Department of Food and Public Distribution Director at the Department of Food and Public Distribution added, “Many people are raising the question that diverting grains to ethanol may lead to food shortage. If we look at the data, our country produces about 122 million tons of rice every year and we have enough stocks. This year our exports are going higher because of the international scenario and we are getting better prices. If the market is positive and farmers are getting a profit, then this shouldn’t be a concern. “
For ethanol, we are using damaged food grain and broken rice, and for the balance portion only, we are using FCI rice. We are supplementing damaged food stock with FCI stock. This is again a stimulus for farmers because if we are able to utilize the rice available with FCI judiciously, it will encourage more procurement in the market and we can ensure better prices for farmers.
In a way, the entire development of ethanol is a win-win situation, and in this whole scenario, the government of India is keeping the farmers at the center stage. Using ethanol for rice or damaged food grains will not result in any food security issues in our country as of now.
3. SIAM Aligned with GoI’s Vision 20% Ethanol Blending with Petrol by 2025
PK Banerjee, Executive Director, SIAM (Society of Indian Automobile Manufacturers) said, “SIAM is fully aligned with the vision of the Government of India. The entire automobile industry is working very closely with the stakeholders to ensure that the milestones are defined by the Government of India. “
“If you take the annual numbers, about 2.5 crore vehicles are produced every year on an average. Out of this 80% are two-wheelers, 15% -17% are four-wheelers and 3-4% are three-wheelers. With this backdrop, we can say that about 70% of gasoline is annually used by two-wheelers and 30% of gasoline is being used by 4-wheelers. With the growing number of vehicles added every year, we are very clear that the high blends of ethanol use are roadmap not only from an energy security point of view but also for greenhouse gas mitigation, reduction of local pollution, improvement of farmer incomes, And as well as the entire Atma Nirbhar Bharat mission. ”
4. EVs are not a concern to Ethanol
Anurag Saraogi, CGM, BPCL – Biofuels, said, “Ethanol sales are influenced by petrol sales, vehicle profile and blending mandate in the country. From an offtake point of view, Ethanol demand will be driven by the vehicle profile on the road. A slight bit of disruption is expected from Electric Vehicles but that would be largely offset by the introduction of flex-fuel vehicles that can take anything up to 20% of what is currently talked about about 85% of ethanol in the vehicle. “
“Indian ethanol mandate is currently 20%. But there is a great opportunity to go beyond that. For example, in Brazil, the average share of ethanol, because of the flex-fuel vehicles, is anything between 46 and 49% of the fuel sales component to petrol-driven vehicles. This means that there is a huge opportunity for India to go from 20% to as high as 46% if all the factors are favorable. “
5. Current Status of Lending for Ethanol Projects – SBI’s Take on Ethanol
Manju Bolakani, Chief General Manager, SBI, said, “We have sanctioned about 2500 crores worth of projects and there are about 25 units that we have financed. I am sure the figures reported by other banks would also be equally good. It’s a good step that the DFPD has been monitoring its ability to build on its portal to ensure that non-serious players are filtered out.
6. OMCs have touched 10% blending in a month
Sridhar Goud, Executive Director, Supplies Operations and Distribution, HPCL, “This is the first time that OMCs have touched 10% ethanol blending in a month. Earlier, when this program was started, there were very few players who were offering ethanol. Mainly from the states of UP, Maharashtra, and some portions of Karnataka too. The competition is used in such a way that suppliers are used to offer discounts on transportation. At some point of time, the suppliers would quote the transportation rate in the negative as well. There have been many government initiatives that have been rolled out and this has really helped improve the ethanol blending percentage. ”
First published on: 25 Apr 2022, 09:05 IST