India targets 20% ethanol-blended fuel by 2025

Author: Priya Jestin

2021/06/09

MUMBAI (ICIS)--India has brought forward its target to implement a 20% ethanol-blended auto fuel by five years to 2025, which will require a strong boost to domestic ethanol production.

Prime Minister Narendra Modi announced on 5 June the timeline change to the country’s national biofuels policy, with the release of a new “Roadmap for ethanol blending in India 2020-25”.

Oil marketing companies such as Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) will be expected to provide 20% ethanol-blended fuel from April 2023 onward, with the full transition expected in two years.

Some states such as Maharashtra, Uttar Pradesh, where ethanol is in surplus, are expected to be the firsts to adopt the higher ethanol fuel blending rate.

Cities in the states of Karnataka, Haryana, Goa, Delhi, Uttarakhand, Himachal Pradesh, Bihar, Punjab are also expected to implement the same two years ahead of schedule.

Currently, India’s ethanol blending rate in fuel is at 8%, which should increase to 10% by 2022 based on the roadmap.

To meet the new targets under its national biofuels policy, India will have to boost ethanol production, which is currently solely derived from sugarcane.

Ethanol production in the country is mostly concentrated in four to five states, where sugar production is high.

In recent years, the government has encouraged setting up of grain-based and agricultural waste-based plants to produce ethanol.

These second-generation ethanol plants are in various stages of construction and should be available in the next two to three years.

Oil marketing companies are expected to procure 3.32bn litres of ethanol from distilleries for blending with petrol during the 2020-21 procurement year - which runs from December 2020 to November 2021.

To meet the ethanol requirement target of 20%, India will need to augment its sugarcane-based ethanol production capacity by 78% to 7.6bn litres, and build grain-based ethanol capacity of 7.4bn litres as per the government’s roadmap.

Based on a 10% ethanol blend in fuel, the country’s annual ethanol requirement is pegged at more than 4bn litres.

The government hopes to encourage increased private production of ethanol through loan-based schemes, while it is building around 12 2G bio-refineries to help augment grain-based ethanol production capacity.

India's Godavari Biorefineries Ltd is boosting the capacity of its sugarcane syrup-based ethanol plant by 50% to 600,000 litres/day. This will make the company one of the biggest syrup-based ethanol facilities in India.

State-run Steel Authority of India Ltd (SAIL), the country's largest steel maker, plans to construct India's first gas-to-ethanol facility at its ferro alloy plant in Chandrapur, Maharashtra.

It expects to invest Indian rupees (Rs) 4bn ($54.8m) to produce 50,000 litres/day of ethanol from the facility, which will convert gases such as carbon dioxide, carbon monoxide and hydrogen into ethanol using fermentation technology.

Bharat Petroleum Corp Ltd’s (BPCL) 2G bio-refinery with a 30m litre/year capacity for fuel-grade ethanol should be operational by 2022, a company source said.

As part of the ethanol roadmap, the country is also prioritizing roll-out of vehicles compatible with ethanol-blended fuel.

The Ministry of Road Transport & Highways started requiring auto manufacturers in March this year to indicate the ethanol compatibility of new vehicles.

“The compatibility of the vehicle to the percentage of ethanol in the blend shall be defined by the vehicle manufacturer and will be displayed on the vehicle by putting a visible sticker,” according to the ministry notification.

As India begins rolling out ethanol-blended fuels over the next few years, auto companies will need to produce vehicles with rubberized parts, plastic components and elastomers compatible with the blended fuels and engines optimally designed for use of 20% ethanol-blended fuel.

The government expects automakers to begin production of ethanol-blended fuel compliant vehicles by April 2022.

Focus article by Priya Jestin

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