India’s Ethanol Revolution marks a significant shift towards cleaner and more sustainable energy. By increasing the use of ethanol—a renewable fuel made from plant materials like sugarcane and corn—India aims to reduce its dependence on fossil fuels, lower greenhouse gas emissions, and support the agricultural sector. This move not only helps in combating climate change but also boosts rural economies by providing farmers with an additional source of income. The Ethanol Revolution is a crucial step in India’s journey toward energy security and environmental sustainability.
Tags: GS- 3,Economy- Growth & Development- Production- Renewable Energy
For Prelims: NAFED, Ethanol Blending Program (EBP), National Policy on Biofuels, Differential Ethanol Pricing, Interest Subvention Scheme.
For Mains: Ethanol, Ethanol Blending Program: Significance, Challenges, Government Policies and Way Forward.
Context:
- While Ethanol Blended Petrol (EBP) increased from 1.6% in 2013-14 to 11.8% in 2022-23, the 20% target by 2025 has run into trouble with low sugar stocks in 2022-23 and the impending shortfall in sugarcane production this year.
- The recent authorisation of the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers’ Federation of India (NCCF) to procure maize (corn) for supplying ethanol distilleries indicates emphasis on this transition and will boost an organised maize-feed supply chain for ethanol.
What is Ethanol?
- Ethanol : Ethanol is a clear, colourless, and flammable organic liquid with a distinctive odour.
- Production: It is produced through the fermentation of sugars by yeast, a process also used in alcoholic beverages, or synthesised through the hydration of ethylene.
- Uses of Ethanol:
- Beverages: Found in alcoholic drinks like beer, wine, and spirits.
- Fuel: Used as a biofuel, often blended with gasoline to create ethanol-blended fuels.
- Industrial Solvent: Utilised in the manufacture of pharmaceuticals, perfumes, and other products due to its solvent properties.
- Medical and Laboratory Uses: Employed as an antiseptic, disinfectant, and preservative.
- Chemical Feedstock: Serves as a raw material for producing various chemicals.
Ethanol Blending Program (EBP):
- Objective and Benefits
- Renewable Fuel Promotion: Aims to increase the use of ethanol, a renewable and environment-friendly fuel, in petrol.
- Foreign Exchange Conservation: Reduces the import of fuels, conserving foreign exchange.
- Sugar Industry Value Addition: Boosts value addition in the sugar industry by utilising by-products.
- Targets and Achievements
- Initial Target: Achieved a 10% ethanol blending target for Ethanol Supply Year (ESY) 2021-22.
- Current Offering: Public Sector Oil Marketing Companies (OMCs) now offer E20 (20% ethanol-blended) petrol.
- Future Goals: The National Policy on Biofuels – 2018 targets 20% ethanol blending by ESY 2025-26.
- Ethanol Production
- Primary Source: Mainly produced from molasses, a by-product of the sugar industry.
- Alternative Raw Materials: Can also be made from sugarcane juice, sugar, sugar syrup, and damaged food grains.
- Government Facilitation Measures
- Pricing and Procedure: Government has fixed remunerative prices and simplified procurement procedures.
- Excise Duty and Financial Assistance: Waived excise duty and extended financial assistance to support ethanol supply.
- Program Impact
- Increased Supply: Ethanol supply to OMCs increased by more than 13 times from ESY 2013-14 to ESY 2022-23.
- Blending Percentage Growth: Blending percentage rose from 1.53% in ESY 2013-14 to a targeted 12% in ESY 2022-23.
- Niti Aayog’s roadmap:
- The capacity of sugarcane-based distilleries would need to increase from 426 crore litres in 2021 to 760 crore litres in 2026.
- Whole grain-based distilleries’ capacity should increase from 258 to 740 crore litres.
What is the Significance of Ethanol Blending in Fuels?
- Reducing Fossil Fuel Dependence
- Energy Self-Reliance: By using ethanol, India can reduce its reliance on imported oil, mitigating vulnerabilities related to global market fluctuations and geopolitical risks.
- Oil Import Reduction: Ethanol blending helps lower oil import levels, enhancing energy security.
- Protecting the Environment
- Cleaner Emissions: Ethanol burns cleaner than gasoline, reducing harmful emissions and improving air quality.
- Emission Reductions: Blending ethanol with petrol can cut carbon monoxide emissions by 30-50% and hydrocarbon emissions by 20%, as per the Indian Institute of Science.
- Supporting Farmers
- Agricultural Demand: Increased ethanol production stimulates demand for crops like sugarcane and corn, boosting farmer incomes and rural livelihoods.
- Rural Development: Creates economic opportunities in agricultural communities through enhanced crop utilisation.
- Enhancing Energy Security
- Domestic Energy Source: Ethanol provides a diverse, domestic energy source, reducing dependency on foreign energy sources.
- Resilience: Increases energy security and resilience by diversifying energy supply sources.
- Generating Economic Benefits
- Industry Growth: Promotes growth in the ethanol industry, leading to job creation, investments, and innovations.
- Cost Savings: Ethanol blending can save the country USD 4 billion annually (Rs. 30,000 crore), supporting a modern and sustainable energy system.
- Engine Performance: Higher octane rating of ethanol improves engine performance and reduces knocking.
What are the Limitations of Ethanol Blending?
- Feedstock Availability and Cost
- Biomass Competition: Large-scale ethanol production requires significant biomass, potentially competing with food and feed uses.
- Seasonal Variability: Availability and cost of feedstocks like sugarcane and corn can fluctuate due to seasonal, weather, and market conditions.
- Conflict with Food Security
- Food vs. Fuel: Using corn for ethanol production can impact food security by diverting grain from food or livestock feed.
- Sugarcane Utilisation: Ethanol from molasses has minimal trade-off with sugar output, though corn diversion affects food prices linked to crude oil prices.
- Conversion Efficiency and Yield
- Production Complexities: Ethanol production involves complex processes (pretreatment, hydrolysis, fermentation, distillation), with varying efficiencies based on feedstock and technology.
- Yield Variability: Different feedstocks and technologies affect conversion efficiency and the environmental impact of ethanol production.
- Infrastructure and Distribution
- High Costs: Requires substantial investment in infrastructure for transportation, storage, and delivery, including handling ethanol’s corrosive and hygroscopic nature.
- Logistical Challenges: Existing infrastructure may need modifications to accommodate ethanol, leading to additional costs.
- Vehicle Compatibility and Performance
- Engine Modifications: Vehicles may need adaptations for ethanol-blended fuels, impacting engine systems and maintenance.
- Energy Density: Ethanol has lower energy density than gasoline, requiring more volume for the same energy output, which can increase transportation and storage costs.
What are the steps Taken by the Government to Boost Ethanol Blending?
- Differential Ethanol Pricing
- Pricing Policy: The government has established different prices for ethanol derived from C heavy molasses, B heavy molasses, sugarcane juice/sugar/sugar syrup, and damaged food grains or rice.
- Annual Revisions: Prices are updated annually by the Cabinet Committee on Economic Affairs (CCEA) based on production costs, availability, and demand.
- Impact: This policy has increased ethanol supply for the Ethanol Blended Petrol (EBP) program, aiding the achievement of a 20% blending target by 2025.
- Interest Subvention Scheme
- Objective: To boost ethanol production capacity and meet blending targets, the government has introduced interest subvention schemes from July 2018 to April 2022.
- Support: Entrepreneurs are supported in setting up or expanding distilleries (molasses-based, grain-based, dual-feed) with a 6% annual interest subvention or 50% of the bank rate, whichever is lower, for five years including a one-year moratorium.
- Tax Relief
- Lower Taxes: Reduced taxes on E10 and E20 blends make them more competitive compared to unblended petrol.
- Excise Duty and GST: Lower excise duty and GST rates on ethanol compared to petrol.
- Incentives for E20-Compatible Vehicles
- Tax Benefits: Consideration of tax benefits and other incentives for manufacturers and buyers of vehicles compatible with higher ethanol blends.
Steps to Further Boost the Ethanol Program:
- Production Boost
- Diversify Feedstock: Promote production from non-food sources like cellulosic biomass, waste paper, and agricultural residues to avoid food security conflicts and utilise waste.
- Support 2G and 3G Biofuels: Invest in research and development for second and third-generation ethanol technologies using non-edible resources.
- Expand Production Capacity: Encourage the establishment of new distilleries and modernization of existing ones through financial incentives and streamlined processes.
- Promote Regional Production: Establish distilleries near fuel depots to reduce transportation costs and improve logistics.
- Policy and Market Mechanisms
- Raise Blending Mandate: Gradually increase the mandatory ethanol blending percentage beyond the current 20% target for 2025 to ensure a stable market.
- Long-term Contracts: Offer fixed-price contracts with oil marketing companies to stabilise investments in ethanol production.
- Support Research and Development: Invest in research to optimise blending ratios, address engine compatibility issues, and develop efficient conversion technologies.
- Technological Advancement
- Upgrade Infrastructure: Invest in storage and transportation infrastructure for ethanol to improve supply chain efficiency.
- Vehicle Compatibility: Collaborate with automobile manufacturers to develop engines and vehicles compatible with higher ethanol blends.
- Quality Control: Implement stringent quality standards for ethanol production and blending to ensure fuel performance and vehicle safety.
- Public Awareness and Education
- Create Awareness Campaigns: Educate consumers about the benefits of ethanol blending, address concerns about vehicle impacts, and promote adoption.
- Transparency and Labelling: Ensure clear labelling of ethanol-blended fuels at petrol stations to inform consumer choices.
Conclusion:
India’s Ethanol Blending Program has achieved significant milestones over the past 8-10 years, enhancing energy security, saving over Rs. 41,500 crore in foreign exchange, reducing Greenhouse Gas (GHG) emissions by 27 lakh Metric Tonnes, and providing over Rs. 40,600 crore in payments to farmers.
UPSC Civil Services Examination, Previous Year Questions (PYQ)
Prelims
Q:1 Given below are the names of four energy crops. Which one of them can be cultivated for ethanol? (2010)
- Jatropha
- Maize
- Pongamia
- Sunflower
Ans: (b)
Q:2 According to India’s National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels? (2020)
- Cassava
- Damaged wheat grains
- Groundnut seeds
- Horse gram
- Rotten potatoes
- Sugar beet
Select the correct answer using the code given below:
- 1, 2, 5 and 6 only
- 1, 3, 4 and 6 only
- 2, 3, 4 and 5 only
- 1, 2, 3, 4, 5 and 6
Ans: (a)
Source: TH
FAQs
Q: What is India’s Ethanol Revolution?
- Answer: India’s Ethanol Revolution refers to the country’s push to increase the production and use of ethanol, a type of biofuel made from crops like sugarcane. The goal is to blend more ethanol with petrol to reduce pollution, lower the import of oil, and boost the income of farmers.
Q: Why is ethanol important for India?
- Answer: Ethanol is important because it helps reduce India’s dependence on imported oil, cuts down harmful emissions, and provides a renewable source of energy. Additionally, it supports the agriculture sector by providing farmers with an alternative market for their crops.
Q: How does the Ethanol Revolution benefit the environment?
- Answer: The Ethanol Revolution benefits the environment by reducing the carbon footprint of vehicles. When ethanol is blended with petrol, it burns cleaner, producing fewer greenhouse gases and pollutants. This helps in the fight against climate change and improves air quality.
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