Rs. 12,500 Cr loan granted to 185 sugar & distilleries for ethanol projects

It is likely that these projects would be completed in another 3-4 years, thereby achieving the desired blending target

  • By Pravin Prashant | November 20, 2020

185 applicants i.e. 85 sugar mills and 100 molasses based stand alone distilleries are being granted in principle approval for availing loan amount of Rs. 12,500 crore for capacity addition of about 468 crore litres per annum. 
It is likely that these projects would be completed in another 3-4 years, thereby achieving the desired blending target. However, as the blending targets cannot be achieved only by diverting sugarcane/sugar to ethanol therefore, the government is also encouraging distilleries to produce Ethanol from other feed stocks like grains, etc. for which the present distillation capacity is not sufficient.
Therefore, concerted efforts are being made by the government to enhance ethanol distillation capacity in the country by 720 crore litre for producing ethanol from 1st Generation (1G) feed stocks like sugarcane, molasses, grains, sugar beet, sweet sorghum etc. With use of other feedstocks, ethanol can be produced in non-sugarcane states and this will help in distributed ethanol production in the country.
In view of surplus availability of rice in the country, the government is making efforts for production of Ethanol from surplus rice with FCI to supply Oil marketing companies to mix with petrol in ethanol supply year 2020-21 (December-November). 
Efforts are also being made to produce ethanol from maize in states which have sufficient production of maize. In the current Ethanol Supply Year 2019-20 only 168 crore litres of Ethanol is likely to be supplied to OMCs for blending with petrol thereby achieving 4.8% blending levels. 
However, in the ensuing ethanol supply year 2020-21, efforts are being made to supply 325 crore litres of ethanol to OMCs thereby achieving 8.5% blending; and in the ethanol supply year 2021-22 ending in November, 2022 efforts are being made to achieve 10% blending target which is quite possible in view of the concerted efforts made by the government. 
For Year 2020-21, bids of 322 crore litres (289 crore from molasses and 34 crore litre from grains) have already been received in first tender floated by OMCs and in subsequent tenders more quantity from molasses and grain based distilleries will come, thus government will be able to achieve 325 crore litre and 8.5% blending target.
In next few years with 20% ethanol blending with petrol, the government will be able to reduce import of crude oil, a step towards being Aatma Nirbhar in the petroleum sector and this will also help in increasing the income of farmers and creating additional employment in distilleries.

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