Crude oil is not a renewable resource, but for the average Indian, it’s still the only fuel available to them.
It’s no secret that India’s over-reliance on fossil fuels leaves the country dangerously exposed to a wide range of supply disruptions. India is the world’s third-largest crude oil importer and imports more than 80% of its oil requirements.
Moreover, much of carbon emissions are coming from fossil fuel production and distribution.
Considering the many harmful impacts of burning fuel, Indian policymakers are making a concerted effort to promote more eco-friendly alternative fuels like biodiesel and ethanol.
India’s progress in Biofuels and Ethanol
India initiated the use of ethanol as an automotive fuel in the year 2003 when India’s Ministry of Petroleum and Natural Gas mandated the blending of 5% ethanol in major sugar-producing states.
Over the years, the Government of India has taken a number of initiatives to boost the production of biofuels by administering price mechanisms and opening potential routes for biofuel production.
In 2018, the Indian government introduced the National Biofuel Policy to promote ethanol-blended auto fuel in the next five to seven years and increase domestic production of Ethanol.
The new price mechanisms and opening of potential routes of biofuel production have started showing results as well. Ethanol blending has improved from 1.5% in 2013 to about 8% in 2020.
The plan for the ethanol blending program is to achieve 20% blending levels with petrol by 2025 throughout the country.
Petrol demand in India is pegged at 5000 crore liters by 2025, which translates into 1000 crore liters of ethanol demand.
From where will India get the Ethanol?
India produces 6 million tonnes of excess sugar every year, which is currently exported with the help of government subsidies. Moreover, India’s Food Corporation has more than 50 million tonnes of excess food grain stock and 6 million tonnes of sugarcane that could be utilized to produce ethanol for blending requirements.
The sugar Industry & other agri-based companies are creating massive distillery capacities to produce ethanol by diverting excess sugarcane & grains.
Large sugar manufacturers such as Balrampur Chini Mills, Dalmia Bharat Sugar, Shree Renuka have announced major investments to leverage their sugar mills to make ethanol.
The government is also encouraging Industry by providing financial support and facilitating tri-party contracts between Banks, OMCs & Ethanol manufacturers.
In addition, various state governments have announced their own biofuels policy to promote ethanol production.
Automobiles to run on 100% Ethanol
The Indian government has also recommended to the automobile manufacturers to roll out flex-fuel vehicles capable of running on 100% ethanol or petrol in the Indian market in the next 1-2 years. A Flex-fuel engine is an internal combustion engine that is capable of running on 100% petrol or 100% ethanol.
Advantage of India’s progress in Ethanol production
The ethanol blending program has created an entire eco-system to achieve a 20% blending target, which would benefit in terms of reducing fossil fuel usage, curb crude imports, providing additional income to the farmers & change the fundamentals of beleaguered sugar & other agri-based Industries.
What is Ethanol? Read more here
We spoke to a technology startup that is working to create an ethanol ecosystem, you can read our conversation with its founder Kishan .