Surplus sugar, rice for ethanol production as India eyes 20% blending with petrol by 2025

India is set to double its ethanol distillation capacities by 2025 with the diversion of surplus sugar and rice till the country increases the production of maize, the preferred grain for manufacturing the alternative fuel.

The government has also announced an interest subvention scheme to encourage the setting up of distilleries for manufacturing ethanol to boost its blending with petrol to the tune of 20% by 2023.

Earlier this month, Prime Minister Narendra Modi advanced India’s targeted transition to 20% ethanol blending in petrol by five years to 2025. The government aims to introduce ‘E20’, as the 20% ethanol blended petrol is called, by 2023.

The government has decided to divert surplus sugar and broken rice for the production of ethanol, a move that is expected to help sugar mill liquidate excess stock and allow payment of arrears due to farmers.

“The use of rice (for ethanol production) is provided to give continuity and is a transitory phase so that if they do not have access to enough maize, then they can access rice,” Sudhanshu Pandey, Union Food Secretary, told reporters here.

India currently has the capacity to produce 684 crore litres of ethanol and aims to increase it to 1430 crore litres by 2024-25.

He said in the upcoming sugar season (2021-22) an estimated 35 lakh metric tonnes (LMT) of sugar will be diverted for ethanol production, with an aim to raise this to 60 LMT by 2025.

In the long term, the government plans to promote maize production for ethanol production, which would also help farmers get a better price for the grain.

Currently, 60% of maize produced in the country is used as poultry feed, 20% for human consumption and 20% for the industry, Pandey said adding that the use of maize or producing ethanol was more profitable as it gives a better yield of the alcohol than rice.

In 2018-19, ethanol production in the country reached 189 crore litres leading to 5% blending with petrol. In the current ethanol supply year 2020-21, the production was expected to reach 300 crore litres which would help achieve 8-8.5% blending with petrol.

An estimated 1016 crore litres of ethanol would be required by 2025-26 to achieve 20% blending with petrol.