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HomeIndustry & UpdatesHow sensible is it to use grains to produce ethanol?

How sensible is it to use grains to produce ethanol?

India is planning to use surplus rice, besides sugarcane, to meet its biofuel target of blending 20% ethanol with petrol. Could this impede India’s crop diversification goals or worsen nutritional indicators? Mint explores.

What’s the govt’s plan to promote ethanol?

Early October, the government’s food department revealed its plans to divert 17 million tonnes of surplus rice from its food stocks of 90 million tonnes to produce ethanol. This is in addition to the 2 million tonnes of sugar which is already being diverted to produce ethanol. India is estimated to achieve about 8.5% blending with petrol by this year, which it plans to increase to a mandatory 20% blending by 2025. The plan is to divert its excess sugar production to produce ethanol, 3.5 million tonnes in 2021-22 and 6 million tonnes the next year, in addition to grains like rice, corn, and barley.

How would this benefit the country?

According to Niti Aayog, a successful biofuels programme can save India $4 billion or about 30,000 crore every year by lowering import of petroleum products. Ethanol is also less polluting and offers equivalent efficiency at a lower cost than petrol. The Centre expects that rising production of grains and sugarcane and feasibility of making vehicles compliant to ethanol-blended fuel makes its biofuels policy a strategic requirement. Towards this, it has put in place interest subsidies for distilleries to expand capacity, while oil firms are preparing for a phased roll-out; auto firms have agreed to make compatible vehicles.


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What are the unintended effects of the policy?

Increasing reliance on biofuels can push farmers to grow more water-intensive crops like sugarcane and rice, which currently use 70% of the available irrigation water, negating some positive impact on the environment of using more ethanol. Experts have raised concerns that the move could impact India’s hunger situation by limiting the coverage of the food security schemes.

How will it impact crop diversification?

Although the biofuels policy stresses on using less water-consuming crops, farmers prefer to grow more sugarcane and rice due to price support schemes. Growing more of them can lead to an adverse impact in water-stressed areas in states. At best, diversion of sugar could be used as a temporary measure to reduce excess stocks. But in the long run, it will likely thwart the plan to diversify the crop basket and nudge farmers to grow more pulses and oilseeds which are less water-intensive.

What about food security?

Some experts have pointed out that it is unethical to use edible grains to produce ethanol in a country where hunger is rampant. India, with 14% of its population undernourished and more than a third of its children stunted, ranks 94th out of 107 countries in the Global Hunger Index 2020. Although about 80 crore people are now receiving subsidized food grains, calculations show that over 10 crore eligible households are still excluded. Diversion of mass consumption grains can also push food prices up.

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