Government Unveils Scheme to Establish Bio-Ethanol Plants

August 05, 2024

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(Chemical Industry Digest) Government has unveiled plans to establish several bio-ethanol plants nationwide under the Pradhan Mantri JI-VAN Yojana.

The initiative is designed to foster the production of second-generation (2G) bioethanol from cellulosic and lignocellulosic biomass, promoting cleaner fuel alternatives and bolstering India’s energy security.

Financial support will be provided for the creation of six commercial and four demonstration 2G bioethanol plants. The commercial facilities will be situated in the following locations: Panipat, Haryana: Indian Oil Corporation Ltd, Bargarh, Odisha: Bharat Petroleum Corporation Ltd, Bathinda, Punjab: Hindustan Petroleum Corporation Ltd, Numaligarh, Assam: Numaligarh Refineries Ltd, Davangere, Karnataka: Mangalore Refinery and Petrochemicals Ltd, Nandyal, Andhra Pradesh: RCPL

Demonstration plants will also be established in various locations, including Panipat and Sagauli, to highlight advanced bioethanol production technologies.

The 2G bioethanol plants will employ cutting-edge technologies to convert biomass into ethanol, offering a cleaner and renewable fuel alternative. The initiative aligns with India’s commitment to reducing carbon emissions and reliance on fossil fuels while fostering rural economic growth through sustainable energy production.

Indian Oil Corporation Ltd. (IOCL) has already inaugurated a 2G bioethanol plant in Panipat, Haryana, and has launched a third-generation bioethanol facility at the same site. As reported by fuelsandlubes.com, the initiatives are part of a larger strategy to expand biofuel production and integrate it into the national energy infrastructure. READ MORE

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Excerpt from Republic Business/MSN: Ethanol blending: In a strategic move to accelerate its ethanol blending program, the Indian government is considering a hike in ethanol prices for the upcoming 2024-25 season, which begins in November. This price revision is aimed at incentivizing production and meeting the ambitious goal of 20 per cent ethanol blending by 2025-26, a target initially set for 2030. The proposal also includes the diversification of feedstocks to ensure sustainable production.

Price Revision Linked to Sugarcane CostsThe ethanol price revision, under consideration by a government committee led by a joint secretary from the Ministry of Petroleum, will be based on the fair and remunerative price (FRP) of sugarcane. This adjustment is seen as critical to boosting production and helping India meet its green energy commitments. "The price revision is being considered on priority to incentivize production and meet our blending goals," a government source stated, emphasizing the urgency of the initiative.

Market Impact: Sugar and Ethanol Stocks SurgeFollowing the news, stocks of major sugar and ethanol manufacturers saw significant gains.

...

Government's Multi-Dimensional Approach to BiofuelLast week, Cooperation Minister Amit Shah reiterated the government's commitment to achieving the 20 per cent ethanol blending target by 2025-26. He called for a multi-dimensional approach to biofuel manufacturing, highlighting the role of ethanol in reducing India's dependence on fossil fuels and improving the financial stability of sugar mills.

Current Ethanol Pricing and Production CapacityEthanol prices have remained unchanged since the 2022-23 season,

...

Focus on Ethanol Production and Blending GoalsWhile the sugar industry has requested a hike in ethanol prices, an increase in the minimum selling price of sugar, and permission for sugar exports, the government is prioritizing ethanol production and the achievement of blending targets. This focus aligns with India’s broader objectives of enhancing energy security and promoting sustainable practices. The ministries of petroleum and sugar have yet to respond to queries regarding the potential price revision, but the decision is expected to play a crucial role in shaping the future of India’s ethanol blending program. READ MORE

Excerpt from Siaset Daily: 'The shortage of feedstock is threatening the entire industry and adversely impacting the Centre's ambitious E-20 target by 2025,' (BRS leader B Parthasaradhi) Reddy said -- BRS leader B Parthasaradhi Reddy on Friday urged the government to restore the supply of broken and surplus rice through Food Corporation of India (FCI) for grain-based ethanol makers, which was halted in July 2023.

Speaking during Zero Hour in Rajya Sabha, Reddy said about 131 grain-based ethanol plants have been established across the country with an investment of Rs 25,000 crore in the last four years, inspired by the government’s biofuel policy.

However, the abrupt cessation of FCI rice supply has created a “shock wave” in the industry, he said.

“The shortage of feedstock is threatening the entire industry and adversely impacting the Centre’s ambitious E-20 target by 2025,” Reddy said.

The Bharat Rashtra Samithi (BRS) member noted that while the government has increased broken and damaged rice as well as maize rates from Rs 21 to Rs 29 per kg, the corresponding ethanol price adjustment is not proportional, making the industry unviable.

Reddy urged the government to allow maize imports under a tariff relief quota, similar to provisions for other feed industries.

He reminded that prior to 2018, the Centre depended solely on ethanol derived from molasses for fuel blending. In June 2018, a new biofuel policy was introduced to encourage the use of damaged foodgrains for ethanol production.

The BRS leader emphasized that the government needs about 1,000 crore litres of ethanol to meet the E-20 target by 2025.

The 131 grain-based ethanol plants have a capacity to produce 600 crore litres, meeting 60 per cent of the country’s overall requirement, he added. READ MORE

Excerpt from Bioenergy Insight: India's prime minister, Narenda Modi, has approved extension of a modified Pradhan Mantri JI-VAN scheme until 2028-29.

The scheme provides financial support for integrated bio-ethanol projects in setting up second generation (2G) ethanol projects in the country using lignocellulosic biomass and other renewable feedstocks.

The total financial outlay for the scheme is Rs. 1969.50 crore for the period 2018-19 to 2023-24.

Union Minister Ashwini Vaishnaw further emphasised that long term impact and ethanol blending for ATF will also be taken up in the near future.

The modified scheme extends the timeline for implementation of scheme by five years, and includes advanced biofuels produced from lignocellulosic feedstocks i.e. agricultural and forestry residues, industrial waste, synthesis (syn) gas, algae etc. in its scope.

Bolt on plants & brownfield projects' are also now be eligible to leverage their experience and improve their viability.
Preferences will now be given to project proposals with new technologies and innovations in the sector.

The scheme also aims to provide remunerative income to farmers for their agriculture residue, address environmental pollution, create local employment opportunities, and contribute to India's energy security and self-reliance.

It also supports the development of advanced biofuel technologies and promotes the Make in India Mission.
In addition, it also helps in achieving India’s ambitious target for net-zero GHG emissions by 2070. READ MORE