First refining firm to do so; Bihar sugar units to restart after 14 years
At a time when the ethanol-petrol blending programme has met with only partial success, government-controlled Hindustan Petroleum Corporation Ltd (HPCL) will become the first petroleum company in the country to produce its own ethanol.
Last year, HPCL had taken over two sugar mills in Bihar, at Sugauli and Lauriya in East and West Champaran districts, on a 60-year lease, extendable by another 30 years. The company had paid around Rs 95 crore for these.
“We will begin ethanol production from these sugar mills by year-end. While we would be using ethanol to blend with petrol at our own fuel depots, we would also be selling the surplus to other industry players,” a senior executive from HPCL told Business Standard.
The two plants will produce a little over 60 kl of ethanol daily. The production would suffice for the blending requirements of Bihar and neighbouring states.
The mills have a crushing capacity of over 3,700 tonnes per day each at these sites. Associated with each of these two mills is a 100 Mw cogeneration power plant . HPCL had invested Rs 614 crore to revive the defunct mills. The two units are more than 75 years old and had been closed since 1996.
More From This Section
Bihar had auctioned 15 such obsolete mills in 2008. HPCL had bid for three and got two. Reliance Industries bagged one. Delhi-based Rollcon Projects and S S Infrastructure of Darbhanga managed one mill each.
Halting blending
The government had, in November 2006, mandated that ethanol-blended petrol be sold through India, except in the northeastern states and Jammu and Kashmir, to reduce emission. Subsequently, it stipulated that the amount of ethanol in petrol might be optionally ramped up to 10 per cent from October 2007 and made compulsory with effect from October 2008. Since the five per cent target itself is still to be fulfilled, dates for higher levels have since been postponed.
Blending of ethanol with petrol is aimed at reducing emissions. Ethanol blends dramatically reduce hydrocarbon emissions — a major ozone layer depletor. The blending programme, that also includes biodiesel, is aimed at reducing the country's dependence on crude oil imports. India imported about 85 per cent of its crude oil requirement, amounting to $8 billion (Rs 38,000 crore), during 2010-11.
Said the HPCL executive of the two units: “We have the flexibility to adjust the ethanol manufacturing capacity. We can either manufacture 50 per cent or 70 per cent (of capacity). Sugar production from the plant will be sold to local trading agencies. We have similar plans in other states but that will be executed post our experience from this plant.”