EBP Goal. India Eyes Sugarcane Model to Raise Maize Output to Meet 20% Ethanol Blending Target

May 04, 2023

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by Prabhudatta Mishra (The Hindu Business Line) The area under sugarcane has to increase, and the subsidised rice offered by FCI is not sustainable, says Food Secretary Sanjeev Chopra -- The Indian government may have to develop a sugarcane-type ecosystem for the maize crop over the next two years if the country has to achieve the 20 per cent ethanol blending with petrol (EBP) target, as the molasses-based units would not be able to meet the entire target.

Under the Sugarcane Control Order, sugar mills are mandated to buy entire sugarcane that will be offered by farmers within a geographical area decided by State governments at not below a price fixed by the Centre. READ MORE

India’s ethanol mandate comes with some hidden trade-offs - India’s push for ethanol has raised concerns about its impact on the environment & food security (Down to Earth)

Was ethanol the reason for the ban on broken rice exports? A look at official data shows that the allocation of Food Corporation of India rice for ethanol was drastically increased in 2021-22, as compared to 2020-21. But the government has now put restrictions due to low production (Down to Earth)

Is ethanol blending in petrol really green? Aggressive sugarcane farming contaminates land, water (Down to Earth)

IEA predicts ethanol demand growth in India on 20% blending target -- Biofuels replaced 2 million barrels of global oil demand a day in 2022 (Money Control)

India's ethanol program will cap future sugar exports, says research firm BMI (Economic Times)

India halts ethanol production from excess rice (Argus Media)

Excerpt from Down to Earth: During the inauguration of the India Energy Week 2023, Prime Minister Narendra Modi highlighted that the country’s energy consumption is projected to increase to 11 per cent of global demand from the current 5 per cent in the near future.

Meanwhile, India heavily relies on imports to meet its energy requirements, with the country currently importing around 80 per cent of its oil requirement. Fossil fuels account for approximately 75 per cent of India’s energy demand, while the remaining share is fulfilled by biofuels derived from agricultural by-products. In this context, policymakers see the utilisation of biofuels as an opportunity to strategically reduce the country’s dependence on imported fossil fuels.

In a bid to reduce reliance on imported fossil fuels, India has outlined its intention to promote the use of ethanol, an important biofuel derived mainly from rice, corn and sugar. In 2003, the Centre launched the Ethanol Blended Petrol (EBP) Programme, which aimed to mix ethanol with petrol, reducing the demand and consequently the consumption of fossil fuels.

Initially, the EBP programme directed oil marketing companies to sell 5 per cent EBP (ethanol 5 per cent, petrol 95 per cent). Today, ethanol accounts for about 10 per cent of the fuel blend. However, this percentage is set to increase as the National Policy on Biofuels-2018 envisaged an indicative target of achieving 20 per cent blending of ethanol in petrol by 2030 under the EBP Programme.

Subsequently, in 2022, the Union Cabinet amended the National Policy on Biofuels, advancing the deadline for fuel companies to increase the ethanol content in petrol to 20 per cent from 2030 to 2025. With its emphasis on ethanol as a fuel, the Centre aims to enhance India’s energy security, curtail dependence on imported fuel, conserve foreign exchange reserves, address environmental concerns and boost the domestic agricultural industry. However, the push for ethanol as a fuel in India is not without its challenges.

Food security & environment

India would need to enhance its feedstock production to achieve its goal of blending 20 per cent ethanol in petrol by 2025 — which would require additional land. If domestic production does not rise, meeting the ethanol blending targets will require an increase in imports, which goes against the goal of energy security that the push for ethanol as a fuel aims to achieve.

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Currently, the government is utilising food grains from the central pool stocks to produce ethanol-blended petrol. These food grains are procured from farmers at minimum support prices and are originally intended for distribution under different schemes to assist impoverished and vulnerable groups.

However, utilising these food grains for ethanol production diverts them from those most in need, exacerbating the country’s hunger situation. It is worth noting that India ranked 107 out of 121 countries in the 2022 Global Hunger Index, indicating a deplorable state of the country’s hunger situation; this may not be the most prudent solution.

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While the roadmap asserts that the surplus food grain production will be adequate to meet the ethanol blending target, reliance on excess stocks is a short-term solution, especially during droughts or when agricultural production is affected by climate change.

Ethanol-based biofuels are often considered a preferable alternative to fossil fuels due to their lower emissions. Studies indicate that burning ethanol results in lesser carbon dioxide emissions than conventional fuels.

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Shifting the focus to food crops rather than agricultural waste can hinder India’s objective to reduce energy dependence and fulfil climate commitments. In a way, the government’s ethanol mandate significantly deviates from its own National Policy on Biofuel. The economic incentives offered by the current policy direction could lead to unsustainable land-use practices that adversely affect food security, water security and net emissions. READ MORE