AIDA has stated that India has already developed an installed capacity for production of 2,825 million litres of alcohol per year. The total requirement of alcohol for all purposes within the country including industrial potable and others is about 1,100 million litres. A major part of the installed capacity has remained under utilised which can be advantageously utilised by producing the required quantity of alcohol for being used as oxygenate in fuels in automobiles. The admixture of alcohol with gasoline or diesel will not only abate environmental pollution but will save foreign exchange outflow to a considerable extent.

AIDA has further stated that it is universally accepted that the utilisation of ethanol-gasoline blends substantially reduces the harmfulemissions of volatile organic compounds, hydro-carbons, oxides of nitrogen, suspended particulate matter, sulphur dioxide and carbon monoxide. Recent studies by French experts have shown that the use of 5 to 7 per cent ethanol admix reduces carbon monoxide emissions by about 15 to 40 per cent while studies by American experts reveal that the reduction is up to 30 per cent.

Three types of oxygenates are used in different parts of the world namely MTBE, ETBE and ethanol. Ethanol is considered to be best as it is also an octane booster. Compared to MTBE, ethanol has many plus points. It contains twice as much oxygen than MTBE or ETBE. Ethanol is also cheaper. The cost of production of MTBE is about Rs 14,000 per tonne and 2 kg of MTBE provides the same amount of oxygen as one litre of ethanol would produce. The price of 2 kg of MTBE would be Rs 28 as against one litre of anhydrous alcohol at Rs 18.50. A large number of distilleries in eight states have already offered to supply 498.8 million litre of anhydrousalcohol (ie ethanol with minimum purity of 99.5 per cent) at Rs 18.58 per bulk litre.

Besides the anti-knock index of ethanol is 113, whereas for MTBE it is 109 and for ETBE it is 100.

AIDA further stated that there are other demerits of MTBE as examined by the inter agency assessment of oxygenated fuels issued by the executive office of the US President. MTBE is not easily bio-degradable and persists in the environment for a long time and finds its way from atmosphere to water streams and to ground water through precipitation. It has been found in high concentrations in some drinking water wells in US. Complaints of acute health problems such as headaches, nausea, diziness and breathing were reported in various areas of US after introduction of gasoline containing MTBE. MTBE has been found to be carcinogen in rats and mice. It has a neuro-active effect that hinderrs performance during periods of high exposures.

Comparatively, ethanol is readily bio-degradable and has no known side effects when blendedwith gasoline as an oxygenate. Ethanol blends are in use in a number of European and south American countries, particularly Brazil and US.

AIDA stated that gasoline-alcohol blend in cars is not a new concept to India. During the Second World War in 1940s when petrol became scare, the use of gasoline was continued till long after the war.