Why in news?
The Union Cabinet has approved a higher procurement price for ethanol purchased by oil marketing companies for the ethanol blended petrol (EBP) programme.
What is ethanol?
- Ethanol is produced from sugarcane, maize, wheat, etc which are high in starch content.
- It can be mixed with gasoline to form different blends.
- As the ethanol molecule contains oxygen, it allows the engine to more completely combust the fuel, resulting in fewer emissions and thereby reducing the occurrence of environmental pollution.
- Since ethanol is produced from plants that harness the power of the sun, ethanol is also considered as renewable fuel.
- Ethanol Blended Petrol (EBP) programme was launched in January, 2003.
- The programme sought to promote the use of alternative and environment friendly fuels and to reduce import dependency for energy requirements.
- During 2001, pilot projects on Ethanol Blended Petrol started at 3 locations i.e. at Miraj, Manmad (Maharashtra) and Aonla/Bareilly in Uttar Pradesh.
- The Government of India decided to launch EBP in January, 2003 for supply of 5% ethanol blended Petrol.
- Subsequent to this, Ethanol Blended Petrol programme was launched in January, 2003 in 9 States.
- The Ministry of Petroleum & Natural Gas (MoP&NG) irected the Oil Marketing Companies (OMCs) to sell 5% Ethanol Blended Petrol in notified 20 States and 4 UTs with effect from 1st November, 2006.
- At present, this programme has been extended to whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands with effect from 01st April, 2019 wherein OMCs sell petrol blended with ethanol up to 10%.
- The OMCs are to procure ethanol from domestic sources and the government has notified the administered price of ethanol since 2014.
- Further, the Government has also allowed production of ethanol from damaged food grains.
- Government has reduced the GST rate on ethanol meant for the EBP Programme from 18% to 5%.
- OMCs are advised to continue according priority of ethanol from 1) sugarcane juice/sugar/sugar syrup, 2) B heavy molasses 3) C heavy molasses and 4) Damaged Food grains/other sources