Context

The Union Cabinet has approved amendments to the National Policy on Biofuels, 2018, to advance the date by which fuel companies have to increase the percentage of ethanol in petrol to 20%, from 2030 to 2025.

Background

• The Ethanol Blended Petrol Programme was launched in 2003 with an aim to promote the use of renewable and environmentally friendly fuels and reduce India’s import dependence for energy security.
• Starting with 5% blending, the government has set a target of 10% ethanol blending by 2022 and 20% blending (E20) by 2030.
• The programme is implemented in accordance with the National Policy on Biofuels.
• Under this programme, oil marketing companies (OMCs) will procure ethanol from domestic sources at prices fixed by the government.
• Till 2018, only sugarcane was used to derive ethanol. Now, the government has extended the ambit of the scheme to include foodgrains like maize, bajra, fruit and vegetable waste, etc. to produce ethanol.
• This move helps farmers gain additional income by selling the extra produce and also broadens the base for ethanol production in the country.

What is Ethanol?

• Ethanol is an organic chemical compound.
• It is a simple alcohol with the chemical formula C2H6O.
• Its formula can be also written as CH3−CH2−OH or C2H5OH, an ethyl group linked to a hydroxyl group. Ethanol is a volatile, flammable, colorless liquid with a characteristic wine-like odor and pungent taste. It is a psychoactive drug, recreational drug, and the active ingredient in alcoholic drinks.
• Ethanol is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
• It has medical applications as an antiseptic and disinfectant.
• It is used as a chemical solvent and in the synthesis of organic compounds.
• Ethanol is a fuel source. Ethanol also can be dehydrated and to make ethylene, an important chemical feedstock.

How it is produced?

• The Department of Food and Public Distribution (DFPD) is the nodal department for the promotion of fuel grade ethanol producing distilleries in the country. The Government has allowed ethanol production/procurement from sugarcane-based raw materials viz. C & B heavy molasses, sugarcane juice sugar sugar syrup, surplus rice with Food Corporation of India (FCI) and maize.
• The supply of ethanol under the EBP Programme has increased from 38 crore litres during 2013-14 to 173 crore litres during 2019-20 resulting in an increase in blend percentage from 1.53% to 5.00% respectively.

Analysis

What is ethanol blending?

• An ethanol blend is defined as a blended motor fuel containing ethyl alcohol that is at least 99% pure, derived from agricultural products, and blended exclusively with petrol.
• Ethanol is one of the principal biofuels, which is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
• It has medical applications as an antiseptic and disinfectant. It is used as a chemical solvent and in the synthesis of organic compounds, apart from being an alternative fuel source.

What is the present status of Ethanol blending in India?

• India achieved 9.45% ethanol blending as on March 13, 2022, according to the Ministry of Petroleum and Natural Gas.
• The Centre projects that this will reach 10% by the end of financial year 2022.
• The government first announced its plans of advancing the 20% blending target in December 2020.

Need for change in the policy

• A 2021 report by the NITI Aayog said that 20% ethanol blending by 2025 could accrue immense benefits such as:
  • Saving ?30,000 crore of foreign exchange per year
  • Increased energy security
  • Lowered carbon emissions
  • Better air quality
  • Self-reliance
  • Better use of damaged foodgrains
  • Increase farmers’ incomes and investment opportunities

Benefits

• The auto fuels we commonly use are mainly derived from the slow geological process of fossilisation, which is why they are also known as fossil fuels. Ethanol in comparison is a biofuel, that is, it is primarily derived from processing organic matter (hence, it is a biofuel). In India, ethanol is largely derived from sugarcane via a fermentation process.
• Since it is a plant-based fuel, ethanol is considered renewable.
• Since ethanol is high in oxygen content, engines using ethanol blends combust fuel more thoroughly reducing vehicular emissions. Hence, this process will also help reduce the country’s carbon footprint.
• Mixing 20 percent ethanol in petrol can potentially reduce the auto fuel import bill by a yearly $4 billion, or Rs 30,000 crore.
• Another major benefit of ethanol blending is the extra income it gives to farmers. Ethanol is derived from sugarcane and also foodgrains. Hence, farmers can earn extra income by selling their surplus produce to ethanol blend manufacturers.

Impacts of Ethanol blending

• Impact on Environment:
  • The use of E20 as fuel reduces carbon monoxide emissions by 50% in two-wheelers and 30% in four-wheeler vehicles.
  • Hydrocarbon emissions also reduce compared to unblended petrol.
  • Ethanol blending can thus reduce emissions in vehicles
• Impact on Consumers:
  • The fuel efficiency of vehicles will reduce by:
  • 6-7% for4 wheelers designed for E0 and calibrated for E10
  • 3-4% for 2 wheelers designed for E0 and calibrated for E10
  • 1-2% for 4 wheelers designed for E10 and calibrated for E20
  • However, with improvements in engines, the loss in fuel efficiency can be minimised.
• Impact on Vehicle Manufacturer:
  • Engines and components will need to be tested and calibrated with E20 as fuel.
  • No major change in the assembly line is required.
  • Vendors need to be developed for the procurement of additional components compatible with E20.
    
    

Challenges associated

Although promising, the ethanol blending programme faces several challenges and concerns. Some of them are discussed below:

• Availability of sufficient feedstock on a sustainable basis: Current regulations in the country allow production of ethanol from sugarcane, sugar, molasses, maize and damaged foodgrains unfit for human consumption. Further, surplus rice with FCI is also allowed. Some states have demanded that rice procured by state governments be allowed for ethanol production. However, there is the issue of diverting foodgrains from human consumption to ethanol production when hunger and malnutrition are still problems faced by many in the country.
• Production Facilities: Ethanol production facilities have to be augmented if the goals of 20% blending by 2030 are to be achieved. Currently, ethanol production is largely confined to the sugar producing states. Sugar mills, which are the key domestic suppliers of bio-ethanol to OMCs, were able to supply only 57.6% of the total demand. The mills also do not have enough financial stability to invest in biofuel plants.
• Price uncertainty: The prices of both ethanol and sugarcane are fixed by the government leading to concerns among investors regarding the price of bioethanol.
• Availability of Ethanol: Ethanol is not equally available all over the country. This leads to an increase in transportation and logistics costs. Moreover, handling and storage of ethanol are also risky as it is a highly flammable liquid.
• Challenge for vehicle manufacturers: Vehicle manufacturers must work with vendors to develop automobile parts compatible with ethanol. They should work on engine optimisation for higher ethanol blends.
• Environmental clearances: Currently, ethanol production plants/distilleries fall under the “Red category” and require environmental clearance under the Air and Water Acts for new and expansion projects. This often takes a long time leading to delays.

Way forward

• Enhance Infrastructure: A majority of the ethanol units are concentrated in 4 to 5 states where sugar production is high but food grain-based distilleries are now being set up across India.
• There have been efforts to make ethanol from agricultural waste.
• Fund allocation in Automobile sector:
  • All automobile materials produced after 2009 are compatible with 10% ethanol. However they are not compatible with E20.
  • The industry body the Society of Indian Automobile Manufacturers (SIAM) has guaranteed that “once a road-map for making E10 and E20 available in the country is notified… they would gear up to supply compatible vehicles in line with the roadmap”.
• To achieve low carbon emissions:It can solve the problem of agricultural waste as well as sugar rates plummeting due to excess production, therefore providing security to sugarcane farmers.
  • It can help accomplish dual goal of strengthening energy security with low carbon emission.
• To fix the prices of Raw materials: The procurement of ethanol by OMCs is governed by an administered pricing mechanism that fixes prices every year based on the raw material used.
  • This fixing of the price of raw materials for production had led to India producing ethanol at prices higher than other countries.
• Make the process sustainable: The report highlighted the excessive use of water — estimated at 2,860 litres — for the production of one litre of ethanol from sugar.
  • Hence there is a need to move to more environmentally sustainable crops.

Conclusion

The Central Government has resolved to meet the target of 20 percent ethanol blending in petrol by 2025. This will help India strengthen its energy security, enable local enterprises and farmers to participate in the energy economy and reduce vehicular emissions. Hence for attaining E100 i.e. cent percent clean mobility, ambitious ethanol blending program is a must. But the emphasis should also be laid on alternative of ethanol like, Methanol with some modifications can also be used for blending and major source of producing ethanol is sugarcane which is a water intensive crop.