Ethanol – A Saviour that Gives Savings

by Karthik Ganesan (The Indian Express) India needs clear research and development plan to scale up ethanol production -- ... In a bid to arrest the dependence on imported crude, India launched its ethanol blending programme in 2003 but it saw little progress for more than a decade. In 2022, after a concerted policy push for five years, India’s blending programme achieved the significant milestone of 10 per cent ethanol blending in petrol. Plans are now afoot to increase the blending share to 20 per cent (E20) by FY25-26, a target that was brought ahead by five years.

Ethanol producers supplied nearly 430 crore litres of ethanol in 2022. The demand for 20 per cent blending is set to increase India’s ethanol demand to nearly 1,100 crore litres by 2025. But achieving the 2025 target will require investments, and the ability to provide (and divert) the necessary feedstock for the domestic production of ethanol.

Nearly 60 per cent of our petrol demand comes from two-wheelers, which cater to the mobility needs of citizens across the economic spectrum. The remaining 40 per cent demand is from four-wheelers and this share is likely to increase, albeit slowly. Nearly 55 per cent of respondents in a 2021 study focused on urban India by the Council on Energy, Environment and Water indicated their desire (and need) to own a four-wheeler. In line with this aspiration, a NITI Aayog report also indicated a growth in petrol demand by over 45 per cent by 2030, compared to 2021. In such a scenario, blending alone can deliver a small reduction in the overall demand for petrol.

At the same time, EVs are not the silver bullet solution to our mobility needs as the minerals, materials and components they need, present more trade, employment and economic concerns. In such a situation, biofuels and flex-fuel vehicles (that can run almost entirely on biofuels) may merit consideration. To this end, Union Minister Nitin Gadkari recently unveiled India’s first flex fuel vehicle.

Much of India’s supply of ethanol for the blending programme comes from first-generation production – using underlying sugars in food crops, mostly sugarcane (84 per cent) and grain (16 per cent). While the prospects for second-generation (2G) technologies for ethanol production are immense, investments have been slow and even Indian Oil’s state-of-the-art facility will only produce 3 crore litres of 2G ethanol. There are 12 such facilities in various stages of planning and construction but are unlikely to contribute to the lion’s share of ethanol demand. READ MORE