A sugar rush for emissions – on ethanol blending

Source: The post is based on the article “A sugar rush for emissions”published in Business Standardon 6^thMarch 2023.

Syllabus: GS 3 –Environment

Relevance: concerns associated with ethanol production

News: All cars in showrooms have to be E20 compliant from April this year. This means that cars should be able to run with 20 percent ethanol blended petrol.

How much ethanol blending has been achieved by India?

India had already crossed the 10 percent ethanol blended petrol and according to the National Policy on Biofuels, India could hit the 20 percent mark by 2025.

India is the world’s fifth-largest producer of ethanol after the US, Brazil, the European Union (EU) and China.

What is the major concern associated with ethanol production and how has the government tried to tackle it?

Ethanol in India is mostly produced from sugarcane. Other crops from which ethanol can also be produced are maize, broken-rice, wheat, etc.

Hence, one of the concerns with ethanol production from sugarcane is its pricing.

The government has tried to solve the issue of price by adopting the system of Fair and Remunerative Price (FRP) for sugarcane farmers and that of minimum support price for sugar mills.

This has become the reason farmers in Uttar Pradesh and Maharashtra prefer sugarcane to other crops.

This has ultimately led India to surpass Brazil in sugar production in the current sugar season (2022-23) and has become the world’s second-largest exporter.

This FRP and MSP model to control prices of ethanol and expect sugarcane farmers and millers to respond with production shifts has worked well.

For example, the year 2021-22 (October-September) saw about 35 lakh tonnes of sugar diverted for ethanol production. This number is expected to reach 60 lakh tonnes by 2025-26.

What are other concerns with ethanol production in India?

Ethanol Production from other corps: The government has plans to offer price support for maize or broken rice.But due to the higher prices in the market, there has been no attempt by the grain-based distilleries to produce ethanol from these two crops.

Stock reserves for Ethanol: Stocking the ethanol crops is another concern because crops like sugarcane or maize production depends on the weather. However, this issue can be solved once the automobiles incorporate a flexi-fuel design that allows the car to run on any combination of ethanol and oil.

Increasing Demand: As per Niti Aayog, the demand for ethanol is expected to increase 1,016 crore litres by 2025. The domestic production of 684 crore litres will have to jump by 48 per cent to achieve this target.

FIscal Requirement: The government will need more money for FRP and MSP in order to reduce dependence on oil imports.

Read More: Ethanol Blending of Petrol and its challenges: Explained

What can be the way ahead?

There is a need to come up with an option of storage of ethanol like that of petroleum reserves because a sudden drought could be dangerous to the production.