Cabinet approves Mechanism for procurement of ethanol by Public Sector Oil Marketing Companies (OMCs)

The Cabinet Committee on Economic Affairs chaired by Prime Minister Shri Narendra Modi has approved the Mechanism for procurement of ethanol by Public Sector Oil Marketing Companies (OMCs) to carry out the Ethanol Blended Petrol (EBP) Programme- Revision of ethanol price for supply to Public Sector OMCs.

Remunerative price to ethanol suppliers will help in reduction of cane farmer’s arrears, in the process contributing to minimizing the difficulty of sugarcane farmers.

Ethanol availability for EBP Programme is expected to increase significantly due to the higher price for C heavy molasses-based ethanol and enabling procurement of ethanol from B heavy molasses and sugarcane juice for the first time.

Increased ethanol blending in petrol has many benefits including reduction in import dependency, support to the agricultural sector, more environmentally friendly fuel, lesser pollution and additional income to farmers.

Ethanol Blended Petrol (EBP) Programme:

It was launched by the Government in 2003 on a pilot basis which has been subsequently extended to the Notified 21 States and 4 Union Territories to promote the use of alternative and environmentally friendly fuels.

It aims at blending ethanol with petrol, thereby bringing it under the category of biofuels and saving millions of dollars by cutting fuel imports.

Ethanol Blended Petrol Programme is being implemented by the Ministry or Oil Marketing Companies (OMCs).

This intervention also seeks to reduce import dependency on energy requirements and give the boost to the agriculture sector.

India is the third largest consumer of energy in the world after China and the US. Currently, the country is dependent on imports for about 82.1% of its crude oil requirement and to the extent of about 44.4% in case of natural gas.

India is expected to need 10 billion liters of ethanol annually to meet the 20% blending target in 2030 if petrol consumption continues to grow at the current pace. At present, the capacity stands at 1.55 billion liters a year.

There has been a consistent shortfall in supply of ethanol in the past, mainly on account of the cyclical nature of the sugarcane harvests in the country. There is “lack of an integrated approach in the EBP across its value chain.”

The National Policy on Bio-fuels has set a target of 20% blending of biofuels, both for bio-diesel and bio-ethanol. This will require an integrated approach in the Ethanol Blending Programme (EBP). The time is ripe for a cogent and consistent policy and administrative framework in the program implementation for the success of EBP.

Please follow and like us:

Leave a Reply

Your email address will not be published. Required fields are marked *