Department of Food & Public Distribution (DoFPD) has notified a modified scheme to extend financial assistance for producers of “1st Generation” (1G) Ethanol from feed stocks such as Cereals (rice, wheat, barley, corn & sorghum), Sugarcane & Sugar Beet. The Financial Assistance will also be extended to
- Project proponents for increasing their ethanol distillation capacity
- For Converting molasses based distilleries to Dual Feedstock for production of Ethanol.
i.The Main Objective behind the scheme is to achieve 20% Blending of ethanol with Fossil Fuels by 2025 from 2030 (previous target was to achieve 20% blending by 2030).
- It will help in reducing pollution
- Help in Lowering India’s Energy Import dependency
- Will lower the Crude oil import bill
ii.As part of the modified scheme
- Government will bear Interest Subvention for 5 years which includes a 1-year moratorium against the loan availed by the project proponents from banks at 6% per annum or 50% of the rate of Interest charged by banks for capacity addition/new distilleries of distilleries.
- It is expected to bring an investment of INR 40, 000 Crore.
- Fixed remunerative prices for ethanol derived from various feedstocks.
- Government is encouraging distilleries to produce ethanol from maize & rice available with the Food Corporation of India.
iii.The benefits of the scheme are
- Will facilitate diversion of excess sugar to ethanol
- Encourage farmers to diversify their crops, particular to take up maize/corn which need less water compared to sugarcane & rice
- To increase the income of farmers and will make sure that farmers get better prices for their crops.
iv.The production of Sugarcane & Ethanol is mainly concentrated in 3 states – Uttar Pradesh, Maharashtra & Karnataka.
- New Distillers in Different parts of the country will ensure distributed production of ethanol thus saving transportation cost.
v.In order to achieve 20% blending by 2025 & meet requirement of chemical & other sectors India will need 1200 crore litres of alcohol/ethanol.
- The blending percentage of ethanol with petrol is expected to go up from 1.53% in 2013-14 to 10% in 2022.
- It is expected that in current ethanol supply year 2020-21, about 325 crore liters ethanol is likely to be supplied to OMCs to achieve 8.5 % blending levels. It is likely that we will be achieving 10% blending target by 2022 with supply of 400 crore liters of ethanol.
Recent Related News:
i.On December 30, 2020 Bhoramdeo Sahakari Sakhar Utpadak Karkhana Maryadit (BSSUKM), a sugar mill signed MoU with NKJ Biofuel Ltd to set up India’s 1st ethanol plant under PPP model at BSSUKM in Kabirdham(Kawardha), Chhattisgarh.
About Ministry of Consumer Affairs, Food & Public Distribution:
DoFPD is a department under the Ministry of Consumer Affairs, Food & Public Distribution
Union Minister – Piyush Goyal
Minister of State – Raosaheb Patil Danve
