National Biofuel Policy: Government Advances 20 Per Cent Ethanol Blending Goal By Five Years

As part of the amendment approved by the Union cabinet to the National Biofuel Policy-2018 on Wednesday (18 May), the ethanol blending target of 20 per cent in petrol has been advanced to ethanol supply years (ESY) 2025-26 from 2030.

What about the change in target?

The National Policy on Biofuels-2018, provides an indicative target of 20 per cent ethanol blending under the ethanol blended petrol (EBP) programme by 2030.

Based on the encouraging initiatives on the supply side of ethanol, the government has advanced the target of achieving 20 per cent ethanol blending in petrol from 2030 to 2025-26. This was announced by Prime Minister Narendra Modi on 5 June 2021 on World Environment Day while releasing the report of the expert committee on “Roadmap for ethanol blending in India 2020-25”.

Thus, the amendment approved on Wednesday only improvises on target already under implementation and makes it part of the official policy document.

What is the permissible percentage of ethanol blended into petrol in the country at present?

At present, oil marketing companies (OMCs) are required to sell E-10 petrol (10 per cent ethanol blended in petrol) as per Bureau of Indian Standards (BIS) specifications IS-2796. The BIS specifications of E-10 allow 10 per cent ethanol by volume in petrol in the range of 10±1 per cent.

Government, vide its notification dated 2 June 2021, has directed the OMCs to sell ethanol blended petrol with percentage of ethanol up to 20 per cent as per BIS specifications, in all the states and Union Territories. This notification shall come into effect from 1 April 2023.

What is the current status of blending in the country?

In a major achievement, OMCs have achieved 9.99 per cent ethanol blending. The information was shared by Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri on his Twitter handle 9 May.

The OMCs have crossed the threshold much ahead of the year-end target and are now on course to achieve 10 per cent ethanol blending levels by the end of ensuing ethanol supply year (ESY) 2021-22 (1 December 2021 to 31 November 2022).

Do we have enough supply of ethanol to achieve the target of E20?

The quantities of ethanol produced by distilleries in the country and supplied to OMCs for blending with petrol under EBP during the last two ESY 2019-20 and 2020-21 were 173.10 crore litres and 302.30 crore litres respectively.

The ethanol supply under the EBP programme, which was only 38 crore litres in ESY 2013-14, has increased to 173.3 crore litres during ESY 2019-20 and 302 crore litres during ESY 2020-21, government data showed. This has helped achieve approximately 8.1 per cent blending in ESY 2020-21. This is an increase of 61 per cent, up from 5 per cent blending achieved in ESY 2019-20.

However, as sufficient quantities of ethanol are not available, therefore, only around 50 per cent of petrol sold is E10 blended, while the remaining is unblended petrol (E0).

The NITI Aayog report projects an ethanol demand of 10.16 billion litres by 2025, based on the adoption of vehicles. The current ethanol production capacity in India of 4.26 billion litres derives from molasses-based distilleries, and 2.58 billion litres from grain-based distilleries. This is expected to expand to 7.6 billion litres and 7.4 billion litres respectively, and will require six million tonnes of sugar and 16.5 million tonnes of grains per annum by 2025.

On the other hand, Indian Sugar Mills Association (ISMA) estimates a requirement of 10.5 billion litres of ethanol to achieve 20 per cent blending targets by 2025-26. Out of the total requirement, 6-6.5 billion litres are expected to come from sugarcane and molasses while 4-4.5 billion litres from grain and corn.