Emphasis on dramatic changes in ethanol blending program
India’s Ethanol Blending Program is shifting focus from sugarcane-based ethanol to grain-based alternatives, particularly maize and rice. This move aims to enhance energy security and support farmers but raises concerns for the sugar industry. While ethanol prices from sugarcane remain unchanged, government policies favor grain-based production, allocating 24 lakh tonnes of surplus rice for ethanol.
iGrain India – India’s Ethanol Blending Program (EVP) is undergoing significant changes aimed at reducing the nation’s dependence on fossil fuels while boosting the agricultural sector.
Initially focused on sugarcane-based ethanol, the program is now shifting toward utilizing grains, especially rice and maize, for ethanol production.
This change has the potential to significantly impact India’s sugar industry, farmers, and the broader biofuel sector.
However, the shift is not without its challenges. One major concern for the sugar industry is the price stability of ethanol derived from sugarcane juice and B-heavy molasses.
Although the government has increased the price of ethanol from C-heavy molasses and reduced the cost of rice for distilleries, the price of ethanol from sugarcane has not seen an increase in three years.
Despite regular hikes in the fair and remunerative price (FRP) of sugarcane, the sugar industry argues that ethanol prices should adjust in line with rising costs.
The financial strain on sugar mills has worsened due to the lack of price adjustments for ethanol derived from sugarcane and the fluctuating price of sugar. In response to this, oil marketing companies (OMCs) are prioritizing ethanol purchases based on cost-effectiveness.
Meanwhile, the government’s focus is now on ramping up grain-based ethanol production, particularly maize.
To further support this effort, the government has allocated a substantial 24 lakh tonnes of rice for ethanol production from its surplus stock, with the possibility of increasing this quantity if necessary.
These changes reflect a dramatic shift in India’s ethanol policy, as it seeks to strike a balance between supporting the agricultural sector, ensuring a stable ethanol supply, and managing the economic challenges faced by the sugar industry.
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Source : Investing.com
