By: ICN Bureau
Last updated : January 15, 2021 10:19 am
State governments have also been requested to facilitate entrepreneurs in arranging land for the project to get environment clearance and providing support in setting up of distilleries.
To achieve 20% blending by 2025 as well as to meet the requirement of Ethanol production capacity in the country, the Department of Food & Public Distribution has modified earlier scheme and notified the modified scheme for extending financial assistance to project proponents for enhancement of their Ethanol distillation capacity or to set up distilleries for producing 1st Generation (1G) Ethanol.
The Ist Generation (1G) Ethanol will be produced from feed stocks such as cereals (rice, wheat, barley, corn and sorghum), sugarcane, sugar beet etc. or converting molasses based distilleries to dual feedstock vide notification dated 14th January, 2021.
For availing assistance under this scheme, the sugar mills/distilleries/entrepreneurs would be required to submit an application in the prescribed proforma to DFPD within 30 days from the date of notification of the scheme on the DFPD portal.
The Chief Secretaries of all state governments/UTs have been requested to promote the scheme to the entrepreneurs of their state and encourage them to participate in the scheme so that the target set by the government could be achieved well within the timeline. State governments have also been requested to facilitate entrepreneurs in arranging land for the project to get environment clearance and providing support in setting up of distilleries.
Under the scheme, the government would bear interest subvention for five years including one year moratorium against the loan availed by project proponents from banks @ 6% per annum or 50% of the rate of interest charged by banks whichever is lower for setting up of new distilleries or expansion of existing distilleries or converting molasses based distilleries to dual feedstock. This will bring an investment of about Rs. 40,000 crores.
This scheme would not only facilitate diversion of excess sugar to Ethanol but would also encourage farmers to diversify their crops to cultivate particularly maize/corn which needs less water compared to sugarcane and rice. It would enhance production of Ethanol from various feedstocks thereby, facilitate in achieving blending targets of Ethanol with petrol and would reduce import dependency on crude oil thereby realizing the goal of Atmanirbhar Bharat.
Sugarcane and Ethanol is produced mainly in three states - Uttar Pradesh, Maharashtra and Karnataka. Transporting Ethanol to far flung states from these three states involves huge transportation costs. By bringing new grain based distilleries in the entire country would result in distributed production of Ethanol and would save a lot of transportation cost and thus prevent delays in meeting the blending target and would benefit the farmers across the country.
With a view of support sugar sector and in the interest of sugarcane farmers, the government has also allowed production of Ethanol from B-heavy molasses, sugarcane juice, sugar syrup and sugar and has been fixing the remunerative ex-mill price of Ethanol derived from C-heavy molasses, B-heavy molasses and ethanol derived from sugarcane juice/sugar/sugar syrup for ethanol season. To increase production of fuel grade Ethanol, the government is also encouraging distilleries to produce ethanol from maize and rice available with the Food Corporation of India.