India on track to achieve 20% ethanol blending by 2025

India is on track to achieve 20% ethanol blending by 2025, and has enough feedstock to produce 10 billion litre of the organic chemical compound, industry body Indian Sugar Mills Association (ISMA) said on Friday.

Addressing a meet, director general of ISMA Abhinash Verma said from a current replacement level of 8.2% of ethanol, the country is looking at a 20% replacement by 2025. “Around 12 billion litre of installed capacity would be required by the year 2025 for ethanol production and against that we are looking at 6- 6.5 billion litre of installed capacity in sugarcane, 5-5.5-billion litre capacitie in grain or corn side, which means a total of 10 billion litre of ethanol,” he said.

In 2021, the production capacity in the country is at 6 billion litre, including 5 billion litre from molasses-based sector and standalone molasses units. With several incentives (by the Centre, and now several states), huge interest is being shown by investors to set up ethanol production capacities, Verma said. Around 800 projects have been registered with the Centre, he said. Some sugar companies are setting up dual-feed ethanol plants, where corn and grains can be used in addition to sugarcane and molasses. Therefore, by 2025, adequate capacities are expected to produce and supply around 10 billion litre of ethanol, he said.

At present, the current supplies of 3 billion litre includes diversion of 2 million tonne of sugar to ethanol. The diversion of another 5 million tonne of the surplus sugar produced each year will give an additional 3 billion litre of ethanol, he said. This means the country has enough feedstock to get around 6 to 6.5 billion litres of ethanol from molasses and sugarcane by 2025. “Another 4.5 billion litre would come from corn and grain. That will require around 16-17 million tonne of corn and grain. The current yield of corn in India is 3 tonne per hectare, which gives 28 million tonne of corn. Increasing yields to the world average, India can produce another 18.5 million tonne of corn, and this will take care of the feedstock requirements,” he said.

More importantly, no diversion of crop area would be required to meet the ethanol production targets.

On the demand side, India will need vehicles that can take 20% blended ethanol. The government has announced that from April 2023 all new vehicles will be E20 compliant. “There is also news that the government will order for FFV (flex fuel vehicle) production soon. So a significant part of the fleet of vehicles will run on 85% ethanol. It has also fixed standards for E12 and E15 vehicles, which are expected to be rolled out over next two-three years,” Verma said. Hence, by 2025, India will have a fleet of vehicles which are E12-15 compliant, E20 compliant in addition to FFVs, he said.

Sridhar Goud, ED, Hindustan Petroleum Corporation (HPCL), said that ethanol blending has been achieved in all the states and Union territories (UTs) in 2020-21.“The business of ethanol is more than Rs 20,000-crore opportunity in the current year and there have been 220 bidders in the current EOIs which are floated every month. The oil marketing companies (OMCs) have received the highest allocation of 367 crore litre and OMCs have also achieved highest- ever ethanol blending of 7.93%,” he said. OMCs are augmenting ethanol tankage from current 17 crore litre to 43 crore litre, he added.