Issue

Context:

• The Ministry of Environment, Forest and Climate Change (MoEF&CC) has notified a special provision that relaxes norms for getting prior environmental clearance (EC) to sugar manufacturing and distillery projects.

About:

• The Environment Impact Assessment (EIA) notification of 2006 had made it mandatory to get an EC for all new projects, their expansion, modernization and change in product mix.
• This implies that EC had to be acquired before beginning construction work or preparation of land by the project management, except for securing the land.

Environment Impact Assessment (EIA):

• The EIA notification has three categories — A, B1 and B2.
• The projects under category A require EC from MoEF&CC.
• Category B1 projects get the EC from the state/union territory Environment Impact Assessment Authority (SEIAA). 
• Projects under category B2 also get EC from the SEIAA. But, B2 category projects do not require an EIA report and are exempted from holding public consultation.

Why did the government opt for “special provision?”

• The latest notification allows all sugar manufacturing and distillery expansion projects to be treated as B2 category under the EIA notification 2006.
• This provision was made to produce ethanol for blending with petrol under the Ethanol Blended with Petrol (EBP) programme.

Ethanol Blended with Petrol (EBP) programme:

• EBP programme was launched by the government in 2003 to promote the use of alternative and environmental friendly fuels.
• This intervention also aimed to reduce import dependency for energy requirements, and give boost to the agriculture sector (supply of straw, additional income to farmers).
• Oil marketing companies (OMCs) were mandated to sell ethanol blended petrol with percentage of ethanol up to 10 per cent. The government allowed procurement of ethanol produced from non-food feed stocks, like cellulosic and ligno-cellulosic materials, including petrochemical route.
• Ligno-cellulosic materials: It describes the main constituents in most plants, namely cellulose, hemicelluloses, and lignin. Lignocellulose is a complex matrix, comprising many different polysaccharides, phenolic polymers and proteins. Cellulose, the major component of cell walls of land plants, is a glucan polysaccharide containing large reservoirs of energy that provide real potential for conversion into biofuels. It is the non-starch based fibrous part of plant material

 Linkages between Sugar Industry and EBP:

• The sugarcane and sugar production in sugar season is generally very high leading to dampening   of sugar prices.   Consequently, sugarcane farmers’ dues have increased due to lower capability of sugar industry to pay the farmers.
• The realization from ethanol is also one of the components in revenue of sugar mills/distilleries, Government has decided to review the price of ethanol derived out of C heavy molasses.

Some elucidations:

• "A" molasses is an intermediate product obtained upon centrifuging the A masecuite (a semi-solid mixture obtained from the juice of sugar cane after several round) in a raw sugar factory. Approximately 77% of the total, available, raw sugar in clarified/concentrated sugarcane juice is extracted during this first centrifugation process.
• "B" molasses is also known as "second" molasses. It, too, is an intermediate product, obtained from boiling together "seed-sugar" and A molasses to obtain a B masecuite, which is then centrifuged to extract an additional 12% of raw sugar. At this point, approximately 89% of the total recoverable raw sugar in the processed cane has been extracted.
• The last molasses is known as "C", molasses. It is the end product obtained upon combining "virgin" sugar crystals obtained from syrup crystallization and B molasses to form a C masecuite, which after boiling and centrifuging produces C sugar and C molasses. Even though C molasses is considered the end or final product in a raw sugar factory, it still contains considerable amounts of sucrose (approximately 32 to 42%) which to date has not been recovered by an economically viable method.

Analysis

Relaxed environmental clearance norms for sugar mills

• The current notification clarifies that the exception has been made to increase the production of ethanol. The cabinet committee on economic affairs in 2018 had increased the price of ethanol to be supplied to OMCs under the EBP to help reduce the arrears of sugarcane farmers.
• Sugar mills in India cumulatively owe Rs 22,000 crore to farmers for cane supplied in 2017-18.
• The idea is that the monitory gains made by the mills through ethanol sale would be used to clear dues of farmers.
• Ethanol blending with petrol is practiced in other countries also. In Thailand, this is as high as 85 per cent.
• If the 10 per cent target was achieved (of EBP), the government would have saved Rs 4,000 crore that the country spends on importing petrol. Moreover, it would have reduced 3 million tonnes of carbon emission, says the new National Policy on Biofuels 2018.

National Policy on Biofuels 2018:

Background:

• Biofuels in India are of strategic importance as it augers well with the ongoing initiatives of the Government such as Make in India, Swachh Bharat Abhiyan, Skill Development and offers great opportunity to integrate with the ambitious targets of doubling of Farmers Income, Import Reduction, Employment Generation, Waste to Wealth Creation.
• Biofuels programme in India has been largely impacted due to the sustained and quantum non-availability of domestic feedstock for biofuel production which needs to be addressed.

Salient Features:

• The Policy categorizes biofuels as "Basic Biofuels" viz. First Generation (1G) bioethanol & biodiesel and "Advanced Biofuels" - Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels, Third Generation (3G) biofuels, bio-CNG etc. to enable extension of appropriate financial and fiscal incentives under each category.
• The Policy expands the scope of raw material for ethanol production by allowing use of Sugarcane Juice, Sugar containing materials like Sugar Beet, Sweet Sorghum, Starch containing materials like Corn, Cassava, Damaged food grains like wheat, broken rice, Rotten Potatoes, unfit for human consumption for ethanol production.
• Farmers are at a risk of not getting appropriate price for their produce during the surplus production phase. Taking this into account, the Policy allows use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee.
• With a thrust on Advanced Biofuels, the Policy indicates a viability gap funding scheme for 2G ethanol Bio refineries of Rs.5000 crore in 6 years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels.
• The Policy encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, Used Cooking Oil, short gestation crops.

Would Benefits outweigh “harm” caused to the environment?

• Relaxing the standards (norms) for sugar industries to increase ethanol production will result in higher degree of pollution.
• Distilleries are among the most water-intensive industries, and will end up putting more stress on the water resources of the local area.
• Ethanol blended petrol, although less polluting, has a much shorter shelf life than normal petrol.

By adopting EBP technologies, agricultural residues/waste which otherwise are burnt by the farmers and mill owners can be converted to ethanol and can fetch a price for these waste if a market is developed for the same. Also, conversion of surplus grains and agricultural biomass can help in price stabilization. One 100 klpd (Kilo Litres per Day) 2G bio refinery can contribute 1200 jobs in Plant Operations, Village Level Entrepreneurs and Supply Chain Management.

Learning Aid

Practice Question:

Relaxing the standards for sugar manufacturing and distillery projects to increase ethanol production will result in higher degree of pollution from these industries. Critically evaluate the statement while basing it on India’s firm INDC commitments.