TVS Motor Company, and Mahindra & Mahindra (M&M) have initiated pilot projects in Pune to produce flex fuel-based engines for two-wheelers. Flex fuel engines help vehicles adapt to higher percentage of blended ethanol in fuel. At present, India blends 8.6% of ethanol and targets to reach 20% by 2025.
In a step towards meeting its ethanol blending target of 20% by 2025, the government had asked auto companies to check the viability of E100 or pure ethanol-based vehicles even as they ready themselves for E20 or 20% blended fuel vehicles.
In a stakeholders meet with the ministry of petroleum and natural gas, sugar manufacturers, and automotive industry body (SIAM) the government proposal of E100 or pure ethanol-based vehicles is being deliberated.
The two pilot projects will check the viability of launching E100 vehicles given the consistent supply of ethanol for a month is not clear. If it can be sustained on an yearly basis will be tested, sources said.
Email queries to TVS Motor and M&M remained unanswered.
The biggest concern with the industry when the aggressive target of 20% blend by 2025 has been set, is to augment the capacity of ethanol which stands at 457 crore litres per annum. It can sustain up to 10% blending. But to reach the 20% level India needs 1,016 crore litres of ethanol per year.
The majority of this ethanol used to come from molasses which had limited supply. However, the government has now facilitated production of grain-based ethanol from waste products such as rice husk, bran, broken rice and wheat stock with FCI and corn.
In January, the Department of Food & Public Distribution received 418 proposals under the modified financial assistance scheme with lower interests on loans to set up an additional ethanol capacity of 1,680 crore litre per year.
Of this new capacity, 840 crore litres would be solely grain-based projects. This is more than triple the country’s estimated capacity of 457 crore liters per year.
Loren Puette, Analyst, Biofuels, S&P Global Platts, said, despite the high proposed volumes, a maximum of 600 crore litres per year, or likely much less, will come online over the next two to four years given the financial infeasibility of many of the projects.
“Irrespective, the bulk, an estimated 55% of proposed new capacity, is based in UP, Maharashtra and Karnataka. The states, already with high blending rates, will likely be the first to achieve E20,” Puette said.