By: ICN Bureau
Last updated : March 06, 2018 8:18 pm
Use of ethanol as feedstock rather than as fuel can earn a net benefit of around USD 297 million, a Confederation of Indian Industry (CII) study has found.The CII had conducted a comparative analysis of economic and environmental use of ethanol for d
Use of ethanol as feedstock rather than as fuel
can earn a net benefit of around USD 297 million, a Confederation of Indian
Industry (CII) study has found.The CII had conducted a comparative analysis of
economic and environmental use of ethanol for different purposes. In a letter to
the Department of Chemicals and Petrochemicals (DCPC), CII estimated that by
diverting 1051 million litres of ethanol for 5 percent EBP programme, the
foreign exchange saving would be around USD 298 million and the net impact on
the chemical industry would be around USD 595 million.
"Hence, the net benefit of foreign exchange owing to use of ethanol as feedstock
than using ethanol as fuel is expected to be around USD 297 million," the CII
said.
The carbon footprint of chemicals manufactured using petrochemical feedstock was
found to be higher than the chemicals manufactured using ethanol as feedstock.
"The total investment in the alcohol-based chemical sector is estimated around
USD 700 million. The total employment is estimated to be around 7,500 people.
Ethanol blending does not require any significant investment and work force.
"Sufficient quantity of alcohol is not available in the country to meet the
demand of all uses," the study said.
The study found that the capacity utilisation of the Indian chemical industry is
dipping because of the following key concerns:
1. The supply between the potential alcohol sector and the chemical industry is
just balanced to meet the current demand. The increase in demand due to ethanol
as fuel would reduce the ethanol availability for the chemical industry, since
potable sector is preferred over any other sector for ethanol supply;
2. Most states do not permit free inter-state movement of alcohol forcing the
industry to buy at higher prices locally; and
3. Some states charge higher sales tax on molasses compared to petro-based raw
materials putting the agro-based route at disadvantage.
The study was done in six parts:
1. Estimation and comparison between carbon footprint of ethanol and petrol as
fuels.
2. Estimation and comparison between carbon footprint of manufacture through the
petroleum route versus manufacture of five ethanol-based chemicals ? acetic
acid, acetaldehyde, ethyl acetate, acetic anhydride and MEG.
3. Estimation of investments made in ethanol-based chemical industry and idle
investments due to non-availability of alcohol.
4. Estimation and comparison of the macro-economic impact of using ethanol as
bio-fuel and as a raw material in the chemical industry including the value
addition to ethanol and impact on foreign exchange.
5. Compilation and comparison of employment generation potential of
ethanol-based bio-fuel industry and chemical industry.
6. Evaluation of the existing and draft government policies pertaining to the
bio-fuel sector, and the ethanol-based chemical industry.