Introduction to Ethanol Blending Program

The ethanol blending program was initiated to help sugar mills generate additional revenue, enabling timely payments to farmers through processing sugarcane into ethanol.

Evolution of Ethanol Production

• Initially, ethanol was produced from C-heavy molasses, a byproduct of sugarcane processing.
• In 2018-19, production expanded to include B-heavy molasses and direct cane juice or syrup.
• Government incentives encouraged these shifts to compensate for reduced sugar recovery.

Ethanol Production Statistics (2013-2019)

• Ethanol supply increased from 38 crore litres to 189 crore litres.
• India's ethanol blending in petrol rose from 1.6% to over 4.9%.

Expansion to Grain-based Ethanol Production

From 2018-19, separate ex-distillery prices were fixed for ethanol derived from sources like rice, maize, and damaged foodgrains. This allowed sugar mills to diversify their ethanol feedstock.

Grain-based Ethanol Production Process

• Involves fermentation of starch in grains, which requires breakdown into simple sugars.

Development of Multi-feedstock Distilleries

• Distilleries capable of processing both molasses and grain were established.
• States like Punjab, Haryana, and Bihar saw growth in grain-based ethanol distilleries.

Recent Trends and Statistics

Ethanol Supply in 2023-24

• Total ethanol supply: 672.49 crore litres.
• Grain-based ethanol (402.22 crore litres) surpassed sugarcane-based ethanol (270.27 crore litres).

Ethanol Sources in 2023-24

• Maize: 286.47 crore litres.
• Broken/damaged foodgrain: 115.62 crore litres.

Shifts in Feedstock Preferences

The shift from sugarcane to grains is driven by two main factors:

• Drought-induced poor sugarcane crops in 2023-24 and 2024-25.
• Higher ex-distillery prices for maize-based ethanol versus sugarcane-based routes.

Policy Implications and Challenges

Excess Capacity and Future Prospects

• Ethanol production capacity: 1,822 crore litres annually.
• OMCs invited tenders for 1,050 crore litres for 2025-26 with a 20% blending target.

Fuel vs. Food Debate

• Maize-based ethanol production impacts feed grain availability, using over 11 million tonnes annually.
• Rice-based ethanol depends on surplus stock, which may not be sustainable long-term.

Role of Sugar as a Feedstock

• Less of a conflict in sugar, where domestic consumption is stable, allowing surplus for biofuel.