Informist, Wednesday, Jun 26, 2024
By Afra Abubacker
NEW DELHI – In a first, India will rely more on ethanol made from grain rather than sugarcane byproducts for blending with petrol in the ethanol supply year 2023-24 (Nov-Oct), government officials and industry experts said. Oil companies purchase ethanol to blend the biofuel with petrol to reduce import bill and promote green energy.
"Right now, ethanol from sugar and grain is on a par. But, going forward, grains will catch up in the third (May-Jul) and fourth quarter (Aug-Oct)," said Deepak Ballani, director general, India Sugar and Bio-Energy Manufacturers Association, on the sidelines of the 64th International Sugar Organisation council meeting in Delhi on Tuesday.
As of May 26, grain-based distilleries had supplied 1.65 bln ltr to oil companies, only a tad up from 1.61 bln ltr from sugar-based distilleries. However, the allocation for the entire ethanol supply year is higher for grain at 4.16 bln ltr, against 2.31 bln ltr from sugarcane by-products, according to Indian Sugar Mills Association data accessed by Informist. Sugar mills have supplied 71.4% of contracted ethanol, while grain-based distilleries have only given 40%.
"Probably this is the first year...we have greater production of ethanol coming from grains rather than sugar," said Food Secretary Sanjeev Chopra at the council meeting. Ethanol is made from starch-containing feedstocks like molasses and grains.
Amid concern over lower sugar production, in December, the government limited sugar diversion for ethanol output at 2 mln tn to ensure sufficient sugar availability in the country. Last year, mills diverted 3.8 mln tn of sugar for ethanol production.
However, to not trail back on the blending targets, in January, the government hiked the price of ethanol from maize by 5.70 rupees to 71.86 rupees a ltr, making it a premium biofuel. Prices of ethanol from sugarcane by-products sugarcane juice, B-heavy molasses, and C-heavy are 65.61 rupees a ltr, 60.73 rupees, and 49.41 rupees, respectively. Ethanol from damaged food grain fetches 64.00 rupees per ltr.
"The government wants to encourage maize production and distilleries to go multifold feedstock," said Prakash Naiknavare, the managing director of the National Federation of Cooperative Sugar Factories. To encourage farmers to take up maize cultivation, it hiked the minimum support price of maize by 128 rupees to 2,090 rupees per 100 kg in 2023-24 kharif marketing season (Oct-Sep).
Asked if grain-based distilleries can fill the gap left by sugarcane by-products, a source from a distilleries association said, "Grain-based sector is geared up to meet the requirement." Though the government is pinning its hopes on maize to achieve ethanol blending targets, sugar industry officials say that the poultry industry's demand for the grain is growing, and ensuring the availability of the feedstock for the biofuel would be a challenge. Maize is a high-protein sought after feed ingredient in the poultry industry.
In the grain basket, only maize and damaged food grains are currently used for making ethanol, as the supply of surplus food grain from the Food Corp of India is yet to resume. In July 2023, FCI halted the supply of subsidised rice to distilleries. The government's move came after it banned the export of non-basmati white rice in July.
However, in the upcoming sugar season starting October, India is likely to spare more sugarcane by-products for ethanol production, as the country expects better sugarcane output on account of good rains. "...This (good rains) will ensure that not only would we be able to meet the requirements of the domestic consumption, but we would also be able to set aside reasonable quantities for the purpose of making ethanol," Chopra said at the council meeting.
After patchy rains last year due to El Nino weather conditions, the India Meteorological Department has forecast above-normal southwest monsoon rainfall this year at 106% of the long-period average, with rainfall likely to be higher in the second half of the season.
To achieve the 15% blending aim, India needs about 8.25 bln ltr ethanol. As of Apr 30, oil marketing companies procured 2.70 bln ltr of ethanol in the ethanol supply year 2023-24 (Nov-Oct) and achieved 12.07% blending with petrol, as per the Ministry of Petroleum and Natural Gas. Last year, total ethanol production was around 5.06 bln ltr, and a larger share of 3.69 bln ltr came from sugarcane-based feedstock, according to the All India Sugar Trade Association.
To reduce dependence on crude oil, India plans to achieve 15% blending of ethanol with petrol in 2023-24 (Nov-Oct), 18% in the subsequent year, and 20% in 2025-26. The ethanol production capacity in the country is about 13.80 bln ltr per annum, out of which about 8.75 bln ltr is molasses-based and about 5.05 bln ltr is grain based, according to government release in December. End
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