Importance of the Ethanol Blending Program

GS 3 – Infrastructure: Energy Conservation, Environmental Pollution and Degradation

Source : The Hindustan Times dated 06/06/2021


On World Environment Day (June 5), Prime Minister Narendra Modi announced that the target of 20% ethanol blended petrol has been advanced by five years to 2025.

What is Ethanol Blending Program?

The Ethanol Blended Petrol (EBP) programme was launched in January, 2003 by the Ministry of Petroleum & Natural Gas (MoP&NG) .

  • The EBP seeks to achieve blending of Ethanol with Petrol with a view to reducing pollution, conserving foreign exchange and increasing value addition in the sugar industry enabling them to clear cane price arrears of farmers.
  • The Oil Marketing Companies (OMCs) are to procure ethanol from domestic sources at remunerative prices fixed by the government.
  • The Central Government extended the ambit of the programme to extract the fuel from surplus quantities of food grains such as maize, jawar, bajra fruit and vegetable waste which was limited only to sugarcane previously.

The ethanol-blending programme is one of the seven key drivers identified by PM Modi for India’s energy map

  1. Gas-based economy
  2. Cleaner use of fossil fuels
  3. Greater reliance on biofuels
  4. Achieving the renewables’ target of 450 GW by 2030
  5. Increasing contribution of electricity to decarbonise mobility
  6. Moving into emerging fuels such as hydrogen
  7. Digital innovation across all energy systems.
  • Helps reduce pollution
    • India, one of the top greenhouse gas emitters, plans to reduce its carbon footprint from the 2005 levels by 33-35% by 2030.
    • When mixed with petrol, ethanol improves the combustion performance and lowers the emissions of carbon monoxide and sulphur oxide.
  • Lowers the crude oil import bill
    • India imports close to 85% of its annual crude oil requirements, and the massive oil bill (it makes up for 21% of the country’s imports) is the biggest driver of the country’s trade deficit, and consequently current account deficit. 
    • India’s oil import bill in FY20 and FY19 was $101.4 billion and $111.9 billion, respectively.
  • Helps  sugarcane and grain farmers
    • May help achieve the goal of doubling farmers’ income.
    • Prevent them from having to burn agricultural waste which can be a major source of air pollution.
  • It could lead to introduction of flex-fuel engines (that can run on more than one fuel and a mixture) in the country in the near future.
Issues and challenges
  • Limited production
    • Sugar mills, which are the key domestic suppliers of bio-ethanol to OMCs, were only able to supply 1.9 billion litres of bio-ethanol to OMCs equating to 57.6 per cent of the total demand of 3.3 billion litres.
    • Many sugar mills which are best placed to produce bioethanol do not have the financial stability to invest in biofuel plants 
    • There are also concerns among investors on the uncertainty of the price of bio-ethanol in the future.
  • Water footprint
    • Increased target for ethanol blending could incentivise water-intensive crops such as sugarcane and rice.
    • Water footprint, that is water required to produce a litre of ethanol, includes rainwater at the root zone used by ethanol-producing plants such as sugarcane, and surface, ground water, and fresh water required to wash away pollutants.
    • WRI says that 54% of the country faces high to extremely high water stress
  • Limited Sugarcane Availability
    • In order to achieve a 20% blend rate, almost one-tenth of the existing net sown area will have to be diverted for sugarcane production. Any such land requirement is likely to put a stress on other crops and has the potential to increase food prices.
Way forward
  • To attract OMCs
    • State governments needs to set up depots where farmers could drop their agricultural waste and that the central government should fix a price for agricultural waste to make investments in 2G bioethanol production an attractive proposition.
  •  The government should focus on lower-water intensity crops such as millets to reduce the water footprint.
  • Alternatives like 3rd generation (derived from algae) and 4th generation biofuels (derived from specially engineered plants or biomass) should be encouraged so that there is reduced stress on food crops.
Associated topicNational Policy on Biofuels

2G bioethanol not only provides a clean source of energy, but also helps to provide greater income to farmers. And hence the government’s decision to advance the target of 20 % ethanol blended petrol to 2025 is a welcome step.

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