Ethanol blending policy

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Biofuels are projected as one of the viable future energy alternatives. India has managed to achieve only 5% blending of ethanol due to certain technical, market and regulatory hurdles. Now the updated policy is seen as a silver lining to boost biofuel usage and reduce the existing dependency on fossil fuel.

Content:

Ethanol Blending policy:

• The proposed ethanol policy will focus on the key features of manufacturing, sale, utilization and blending.
• The policy has proposed a roadmap, which would “increase blending by states from 5 percent to 12-15 percent by 2026, and then increase to 20 percent by 2030.”
• Under the proposed policy, the government is likely to allow use of grain for ethanol and is likely to allow use of maize to supplement ethanol supplies from cane/molasses in the next two-three months.
• The government would fix ethanol prices by next quarter for maize and is likely to fix realistic transport rates at par with petrol to address the price issue.
• To fix transportation challenges the policy will enable creation of pipeline infrastructure for ethanol movement.
• On GST rates, the government is likely to reduce 28 percent GST on molasses, and reduce 18 percent on special denatured spirit to 5 percent. (GST on ethanol is 5 percent from July 2018).

Significance:

• The policy will proportionately reduce India’s dependence on the volatile international crude market to ensure limited price fluctuations.
• It will help correct unstable pricing, high taxes and duties and heavy state control on movement.
• Reduce sugar exports in three years by diverting sugar producers into ethanol.

Challenges for ethanol blending:

• The current domestic production of bioethanol is not sufficient to meet the demand for bio-ethanol for blending with petrol at Indian Oil Marketing Companies (OMCs).
• In India, sugarcane molasses is the major resource for bioethanol production and inconsistency of raw material supply is a major obstacle to blending targets.
• Blend wall is the other challenge towards the biofuel targets. (Blending wall is the maximum percent of ethanol that can be blended to fuel without decreasing the fuel efficiency).
• Ethanol being a highly flammable liquid needs safety and risk assessment measures during all phases of production, storage and transportation.
• The non-uniform distribution of raw material throughout the country demands a compulsory transportation and storage, especially inter-state movement, encountering diverse climatic and topographic conditions.
• The price of obtaining agricultural waste required for the production of bio-ethanol at 2G plants was currently too high for it to be viable for private investors in the country.

2G biofuel:

• Second-generation biofuels, also known as advanced biofuels, are fuels that can be manufactured from various types of non-food biomass.
  
• 2G biofuels are made from different feedstocks and therefore may require different technology to extract useful energy from them.
• These feedstocks include lignocellulosic biomass or woody crops, agricultural residues or waste, dedicated non-food energy crops grown on marginal land unsuitable for food production. 
• It is more expensive than first-generation ethanol.
• The development of 2G biofuels has seen a stimulus since the food v/s fuel dilemma regarding the risk of diverting farmland or crops for biofuels production to the detriment of food supply. 

Biomass stubble and ethanol:

• 2G bioethanol helps to provide greater income to farmers and prevent them from having to burn agricultural waste which is a major source of air pollution.
• As Punjab and Haryana struggle to deal with the stubble burning menace, Indian Oil Corporation Limited (IOCL)’s set up an ethanol plant at Panipat.
• It will convert rice straw into ethanol, thus serving the dual purpose of discouraging stubble burning while also providing them returns for their agricultural waste.
• It also aids in the fulfilment of the goal of ‘doubling farmers’ income by 2022’.
• The project is based on indigenously developed technology and will not leave any waste behind and will produce ethanol with negligible emission from the boiler.
• Stubble burning contributes to about 48% of the total emission in Haryana and Punjab and Haryana is the second largest producer of paddy waste in the country after Punjab.

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