However, incentives will be applicable to Ethanol units selling their produce to the Oil Manufacturing Companies (OMCs)
The State Cabinet has approved the Assam Ethanol Production Promotion Policy 2021. The Policy shall be valid upto 31st March 2026.
Assam’s industries and commerce minister Chandra Mohan Patowary said that Assam is the second State in the country to bring out an ethanol policy, and is thus among the pioneers in the line.
The incentives under the Policy to standalone green-field ethanol producing industrial units – catering solely to Oil Manufacturing Companies (OMCs) for blending with petrol and diesel include Capital Subsidy at 20% of the cost of Plant and Machinery, with maximum Rs 5 crores – in addition to the 30% Capital Subsidy under provision of under North East Industrial Development Scheme (NEIDS)2017.
Besides power Subsidy Re 1 per unit, in addition to the Rs 2 per unit offered under Industrial and Investment Policy of Assam 2019, for a period of 5 years from the date of industrial production; subject to an overall maximum of Rs 75 lakhs per annum. 5% Interest Subsidy on working capital loan for 5 years subject to an overall ceiling of Rs 50 lakhs per annum, in addition to the 2% interest subsidy offered under Industrial and Investment Policy of Assam 2019; and the 3% interest subsidy under NEIDS 2017;
The policy offered, “100% SGST Reimbursement for a period of 5 years, upper limit being 250% of Fixed Capital Investment; in addition to the reimbursement of the central share of the CGST, IGST and Income Tax offered under NEIDS 2017 for a period of 5 years; 100% Exemption of Land Conversion Fees for conversion of land to industrial class, Employment Incentive in the form of reimbursement of expenditure on account of provident fund contribution of permanent resident employees for 5 years; and Skill Development Subsidy of Rs 20,000 per employee, the incentive being applicable only for training of permanent resident employees.
The eligible units shall also enjoy 100% exemption of Stamp Duty and Registration Fees, subject to a monetary ceiling of Rs 25 lakhs only.
The Ministry of Petroleum & Natural Gas formulated the National Policy on Biofuels 2018, which aims to increase the usage of biofuel in the energy and the transportation sector. India’s net import of petroleum was 185 million metric tonnes at a cost of US $55 billion in 2020-21 with a lion’s share of its utilization having been in the transportation sector.
Promoting the use of biofuel like ethanol as a blend stock with main automotive fuel like petrol or diesel can definitely alleviate the draining of the Forex Reserves.
NITI Aayog has also brought out a detailed Roadmap for Ethanol Blending in India.
The minister said, ” Assam has four refineries and produces huge amounts of petrol and diesel, which ensures viability and promise for ethanol projects in Assam.
, which has been importing ethanol for its blending programme and the company is contemplating setting up a captive ethanol plant. Several investors have sent feelers for investing in the sector.”
He said Numaligarh Refinery Limited (NRL) wherein Assam Government has recently raised its share to 26%, is undertaking a JV project with 2 European companies to set up a bio refinery near its existing refinery in Numaligarh which on being commissioned in 2022-23 shall convert 300,000 tons of dry bamboo annually into bio-ethanol and other biofuels. NRL has a 50% stake in the Rs 2600 crore project. Ethanol imports reached a record 750 million liters in 2019, covering over 30% of its total demand. Domestic ethanol production can attenuate the import graph, and the Ethanol Policy of Assam can go a long way in fulfilling that role.