Indian Oil to boost ethanol production via two new bio-refineries

MUMBAI (ICIS)–State-owned Indian Oil Corp (IOC) plans to build two second generation (2G) bio-refineries in the southern states of Telangana and Andhra Pradesh as part of the government’s aim to increase ethanol production in the country, a company source said on Thursday.

Each of the 2G biorefineries will be set up at a cost of Indian rupiah (Rs) 6bn ($83m) and will be able to produce 500,000 litres/day of ethanol from spoilt and surplus food grain from the Food Corporation of India (FCI) as well as agricultural waste such as wheat and paddy straw, the company source said.

These form part of the Indian government’s planned 12 biorefineries to be built across 11 states in the country, namely, Punjab, Haryana, Gujarat, Uttar Pradesh, Madhya Pradesh, Bihar, Assam, Odisha and Maharashtra.

IOC’s plan is still in its initial stages and the company is still awaiting land allotment and necessary clearances to proceed, the company source said.

“Once we get all the required clearances, we will be able to set up the biorefineries in around 18 to 24 months,” the IOC source said, adding that the increased ethanol production would help meet the government’s mandate to blend 20% ethanol into fuel.

According to India’s 2018 National Biofuels Policy, the government is targeting to achieve an ethanol blending rate of 10% by 2022 and 20% by 2030.

In January 2021, the Indian government brought forward its target of achieving 20% ethanol blending in fuel by five years from 2030 to 2025.

“The government has mandated the blending of 10% of ethanol in fuel but right now only around 6% ethanol is being added to fuel,” the IOC source said.

This was mainly due to low ethanol production in the country, he said, adding that nearly 4bn litres of ethanol will be required to achieve the 10% ethanol blending ratio.

India’s total ethanol production capacity stood at 4.26bn litres in the fiscal year ending March 2020 as per official estimates.

The government has projected the ethanol requirement for achieving 20% blending by 2025 at 10bn litres, with sugar mills expected to supply around 6bn litres and the remaining 4bn litres to come from grain-based output and other 2G refineries.

Oil marketing companies such IOC, Hindustan Petroleum Corp Ltd (HPCL), are expected to procure 2.83bn litres of ethanol from distilleries for blending with petrol during the 2020-21 procurement year – which runs from December 2020 to November 2021.

($1= Rs 72.62)