Ethanol production capacity may increase to 375-400 cr litres: ISMA

Topics ethanol | ISMA

Representative image of an ethanol plant

With improved production of sugarcane, India's ethanol production capacity may increase to over 375-400 crore litres, said the Indian Sugar Mills Association of India (ISMA), the apex sugar industry body in the country, on Monday.

The production capacity of ethanol in the country will be more than double of 710 crore litres contracted by the manufacuturers/sugar mills with oil marketing companies (OMCs) for ethanol blending programme (EBP) in the ongoing season 2019-20 (Dec-Nov).

However, the Government of India is targeting an ethanol production and supply target of 300-350 crore litres in 2020-21, and achieve 7.5-8 per cent ethanol blend levels with petrol, the ISMA said in a statement.

"As laid down in the National Biofuels Policy, 2018, the government intends to achieve ethanol with petrol blend levels of 10 per cent by 2022 and 20 per cent by 2030, and therefore, efforts are being made to achieve the targets," the statement said.

Against this, 92.5 crore litres of ethanol have already been supplied to the OMCs between December 1 2019 and June 22, 2020, achieving an average all-India blending of 5.09 per cent with petrol. The blending levels achieved in some states like UP, Haryana, Punjab, Uttarakhand, Bihar and Karnataka is much higher at 8.5 per cent to 9.8 per cent with petrol.

B-heavy molasses and sugarcane juice have been diverted away from sugar, to manufacture and supply 58 crore litres of ethanol to OMCs from in the current ESY up to June 20. As per the contracts entered into by the sugar mills across the country, another 23 crore litres of ethanol will be manufactured from B-molasses and cane juice for supply in the balance period up to November 30, 2020.

This use of B-molasses and cane juice in production of ethanol, and not for sugar production, will result in a diversion of sugar of around 8 lakh tonnes, the ISMA said.

The diversion will not only reduce surplus sugar availability in the country, but also reduce the carrying costs for the sugar mills. It will also give better returns to the mills because ethanol prices fixed by the government are more remunerative than sugar currently, besides giving them better cash flows because of immediate sale of ethanol as compared to delays in the sale of sugar, which could be stuck in the godowns for more than 10-12 months.

Despite the fall in petrol consumption/sales during the lockdown period, the supplies of ethanol were not too badly affected, and sugar mills have been able to supply as per the contracts during the lockdown too, said ISMA.

Accordingly, the blend levels have been maintained at an all-India average of 5 per cent for the country. This could happen because of the good understanding and cooperation between the OMCs and the sugar mills/ethanol manufacturers, when they together agreed to relocate ethanol supplies from depots that were full to other depots and even to distant states, where there was hardly any ethanol being supplied, and therefore there was tankage capacity to take the reallocated ethanol supplies, said the statement.




(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel