Govt May Extend Soft Loans to Grain-Based Units to Spur Ethanol Output

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October 29, 2020

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(Business Standard/Trust of India) Under the scheme, the government has extended twice the interest subvention that comes up to Rs 4,600 crore for a loan amount of Rs 22,000 crore — To boost ethanol production in the country, the government is considering extending subsidised loans to grain-based distilleries also under the ongoing scheme, according to government sources.

The sources said both the petroleum and food ministries are of the view that ethanol production cannot be dependent on one feedstock, that is, sugarcane, for achieving the target of 20 per cent ethanol blending with petrol by 2030.

There is a need to look at other agri-feedstock such as rice, maize, sorghum and barley for making ethanol. After several rounds of discussion, both the ministries are of the opinion to extend soft loans to grain-based distilleries as well under the ongoing scheme, the sources said.

As part of an incentive scheme announced in June 2018, the Centre had approved soft loans for sugar mills to set up new distilleries or upgrade the existing ones, expand capacity, and encourage them to divert sugarcane to ethanol making.

Under the scheme, the government has extended twice the interest subvention that comes up to Rs 4,600 crore for a loan amount of Rs 22,000 crore.

A proposal to modify the existing scheme to include grain-based distilleries would require Cabinet approval, the preparation for which are going on at present, the sources said and added that unused funds under the current scheme will be used for this.

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Currently, India has a total 426 ethanol capacity, of which about 130 crore litres capacity is used for making other products like portable liquor and sanitisers. The rest is available for ethanol making.

With an expected increase in supply of ethanol this year, the government hopes to achieve the target of 10 per cent ethanol blending in 2020-21. READ MORE

Cabinet hikes ethanol price, mandates jute packaging for all food grains (Business Standard)

Oil PSUs to start procurement of ethanol from maize soon (The Hindu Business Line)

Cargill India keen to invest in corn-to-ethanol facilities in India (Financial Express)

Excerpt from Business Standard: The Union Cabinet on Thursday raised the price of ethanol for doping in petrol by 5-8 per cent, I&B Minister Prakash Javadekar said.

The move will help farmers get remunerative price while also cutting down oil imports, he said. As much as 10 per cent ethanol is doped in petrol.

The move also checks pollution as ethanol is environment-friendly, the minister added. READ MORE

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