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HomeIndustry & UpdatesSugar stocks on rally after Nitin Gadkari announces Ethanol based flex engines...

Sugar stocks on rally after Nitin Gadkari announces Ethanol based flex engines scheme

Key Highlights

  • Govt will release a scheme in 3 months that will allow ethanol compatible flex engines in vehicles
  • Govt proposes compatibility of vehicle to level of ethanol blend of E12 or E 15 or E20 or E 85 or E 100 be displayed with a clear sticker
  • Road ministry invites comments from industry and stakeholders within 30 days

Union Minister Nitin Gadkari recently said that India will soon allow flex engines compatible with Ethanol. He also added that a scheme on this will be released within 3 months from now.

In fact, the Ministry of Road, transport and Highway also released a Gazette notification last night on amendment in central vehicle motor rules. The government issued a draft notification on emission standards for E-12, & E-15 for which the Road Ministry has also invited comments within 30 days from industry stakeholders. The draft notification mentions, “Govt proposes compatibility of the vehicle to the level of ethanol blend of E12 or E 15 or E20 or E 85 or E 100 be displayed with a clear sticker and the compatibility of the vehicle to the level of ethanol blend shall be defined by the vehicle manufacturer.”

Union Minister Nitin Gadkari also shared that the government is focused on extracting ethanol not only from sugar but other grains. He said, “We can make ethanol from sugarcane juice molasses and now the government is giving permission to make ethanol from food grains that are from rice, corn and food grains.”

Ethanol blending in India has reached more than 7.2 per cent — the first time it has reached this level — in the first four months of the ethanol supply year 2020-21 (December to November), putting the country on course to meet the target of 10 per cent blending by 2022. In states such as Goa, Karnataka, Maharashtra, Gujarat, Uttar Pradesh, Haryana, Punjab, Delhi, Uttarakhand, and Himachal Pradesh (and Daman and Diu, a Union Territory), 9.5-10 per cent ethanol is being blended with petrol. This means these states are close to the 2022 target

The government has been focused on its agenda of converting surplus sugar and grains into ethanol for fuel consumption. As per official data, in order to achieve the 20% ethanol blending target, India needs 1000 cr litre ethanol capacity whereas OMCs has already bought Rs 283 crore litres of ethanol from sugar mills.

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