In a bid to promote Tamil Nadu as an investment hub for alternate cost-effective green fuel, the state government on Saturday introduced a new ethanol blending policy to attract investments worth Rs 5,000 crore in molasses or grain-based ethanol production capacity in the state.
The policy, which will be valid for a period of 5 years from the date of notification, is aimed at helping the state to be self-sufficient and meet the estimated ethanol blending requirement of 130 crore litres over a period of time.
The state’s petrol requirement is estimated to increase to 474 crore litres by FY 2024-25. With transportation sector accounting for nearly one-fourth of GHG emissions, and considering the projected robust growth of the state’s vehicular fleet, there is an immediate need to transition to alternate cost-effective green fuel that mitigates climate change, according to the policy document.
The state government seeks to improve farmer income through price realisation and expansion in opportunities due to ethanol blending as well as revive the sugar industry in Tamil Nadu through improved utilisation of existing mills and diversification to dual feedstock.
Under the policy, it will apply for grain-based distilleries or expansion of existing grain-based distilleries, new molasses and sugar/syrup-based distilleries or expansion of existing distilleries, new dual feed distilleries or expansion of existing dual feed distilleries — of which one feed will be sourced from molasses, conversion of existing molasses-based distilleries to dual feed and conversion of grain-based distilleries to dual feed.
The policy will strive to enhance import substitution through indigenous sourcing and production of fuel grade ethanol, enable capacity creation and diversification of grain-based distilleries. It will seek to mitigate climate change risks and support diversification through reduction in air pollution arising from fossil fuels.
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Currently, ethanol production in the state is primarily from sugarcane (molasses-based) distilleries.
Under the policy, the state will encourage diversification of feedstock to encourage low water consuming and versatile crops like maize, sorghum and tapioca.
Further, it will come up with appropriate guidelines to utilise damaged rice for ethanol production.
In order to address environmental concerns from the transportation sector, reduce import dependency and boost the agriculture sector, the Centre had launched the ethanol blended petrol (EBP) programme in 2003 with a target of supply of 5% ethanol blended petrol and has now reset its target, to achieve 20% blending of ethanol in petrol by 2025 through the national biofuels policy.
Tamil Nadu has a natural advantage with a total cropped area of 6.63 million hectares from a diversified range of crops such as sugarcane, paddy, maize, tapioca, and sweet sorghum.
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Further, the coverage of irrigated area is higher than the national average.
The EBP programme provides an opportunity for Tamil Nadu to maximise its value addition to the state’s natural resources by promoting indigenous ethanol production based on existing locally available agrocentric resources, expansion of these resources as well as utilisation of surplus and damaged produce.