Bio-fuel boost: Govt to allow ethanol production from surplus rice, says MSME minister Nitin Gadkari

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June 12, 2020 12:15 AM

Gadkari said he had a meeting with PK Sinha, advisor to Prime Minister Narendra Modi, and secretaries from the departments of petroleum, food, agriculture and MSME, and chairman of the food corporation of India (FCI) this week in this regard.

Once the proposal is finally implemented, it will be for the first time that the country will be using grains fit for human consumption to manufacture bio-fuel, industry executives say.Once the proposal is finally implemented, it will be for the first time that the country will be using grains fit for human consumption to manufacture bio-fuel, industry executives say.

Transport and MSME minister Nitin Gadkari on Thursday said the government is considering allowing ethanol production from surplus rice, and not just from cane juice or molasses.

Gadkari said he had a meeting with PK Sinha, advisor to Prime Minister Narendra Modi, and secretaries from the departments of petroleum, food, agriculture and MSME, and chairman of the food corporation of India (FCI) this week in this regard.

Once the proposal is finally implemented, it will be for the first time that the country will be using grains fit for human consumption to manufacture bio-fuel, industry executives say. This also signals a fundamental shift in the approach of the government that had in the past refrained from such a move for fear of jeopardising food security. Given that the country has become self-sufficient in rice production, allowing only a part of the surplus stocks for ethanol production makes much sense, according to a senior government official.

A part of the surplus rice with the FCI, as determined by the government, could be diverted towards ethanol, the industry executives say. Until now, while the sugar industry remains the biggest producer of ethanol, some amount of this bio-fuel is also manufactured from damaged grains (mainly broken rice) that are not fit for consumption. “We are targeting to raise annual domestic ethanol production value from about Rs 20,000 crore to Rs 1 lakh crore in a few years,” he said in a webinar, organised by the Council on Energy, Environment and Water and NIPFP.

Higher use of ethanol in petrol will not just help cut oil import bill but also trim the pollution level, Gadkari said.

The sugar industry has already supplied over 80 crore litres of ethnol to oil-marketing companies for blending with petrol in the current marketing year that started in December 2019, while the bio-fuel made from damaged grains amounted to 2.9 crore. Analysts say the ethanol blending level will improve to 6-6.5% in the current marketing year, against a record 5% in 20 18-19.

The government had first proposed a 5% blending of ethanol with petrol in 2003 and made it mandatory in 2007. In December 2013, the Sharad Pawar panel mooted doubling the blending limit to 10%, which was reiterated by the Cabinet Committee on Economic Affairs in April 2015. In August 2015, Prime Minister Narendra Modi directed ministries concerned to look for ways to make the proposed blending programme a reality soon.

According to an earlier report prepared jointly by Dehradun-based University of Petroleum and Energy Studies and Bengaluru-based Centre for Study of Science, Technology and Policy, if the blending programme can be implemented consistently (and actual blending is raised to 20%), the country could potentially save $6.12 billion by 2021-22. In August 2015, a study by McKinsey had said the country could potentially save as much as $1.7 billion a year if the proposed 10% blending programme is strictly implemented.

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