Centre approves ethanol production from cereals

In a bid to step up ethanol production, the Centre on Wednesday modified a scheme to enhance distillation capacity for producing first-generation ethanol from feedstock such as cereals – rice, wheat, barley, corn & sorghum, sugarcane and sugar beet.

The Union Cabinet approved an interest subvention of Rs 4,573 crore for new distilleries producing ethanol, which can be used for blending with petrol, Petroleum Minister Dharmendra Pradhan said.

Pradhan said that India will need about 1,000 crore litre of ethanol for doping in petrol by 2030 with a view to cut dependency on imports for meeting oil needs. "The nation currently has a capacity of 684 crore litres," he added.

Government has fixed target of 10% blending of fuel-grade ethanol with petrol by 2022 and 20% blending by 2030.

To increase the production of fuel-grade ethanol, the government will also encourage distilleries to produce ethanol from maize and rice available with FCI. Government has fixed remunerative price of ethanol from these produces.

The move is also being seen as a helping hand for the sugar sector and farmers who have been reeling under the pressure of handling excess produce.

There has been surplus production of sugar in the country since 2010-11, except in sugar season 2016-17 due to drought.

The production is likely to remain in surplus in the country in coming years due to the introduction of improved varieties of sugarcane.

In a bid to tackle excess production of sugarcane, the Centre has approved the diversion of excess sugarcane and sugar to ethanol.