Use of FCI rice for ethanol making only an interim measure: Centre

Will achieve 8-8.5 per cent blending with petrol this year, says food secretary Sudhanshu Pandey

The Centre on Tuesday clarified that the use of rice from Food Corporation of India (FCI’s) godowns at a discounted price of Rs 2,000 per quintal is only an intermediary arrangement to ensure that the upcoming grain based distilleries don’t fall short of ready feedstock and the main raw material for such distilleries will continue to be maize not rice.

“If you see the world over too, of the 10,000 crore litres of ethanol produced annually, around 73 per cent comes from maize and a very small proportion is from rice. In India too, surplus rice from FCI will only be used to ensure that 100 crore liters of capacity coming up for grain based distilleries don’t fall short of feedstock while maize production picks up to feed these plants,” food secretary Sudhanshu Pandey told reporters.

He was responding to a question on whether the FCI selling surplus rice at Rs 2,000 per quintal for making ethanol is reasonable while it sells the same rice at higher price for open market operations and also on who bears the subsidy for such cheap sale.

The subsidy will be incurred as the economic cost of FCI rice for 2020-21 is estimated to be around Rs 30 per kg while the same will be sold to grain-based distilleries at Rs 20 per kg as per the new policy.

Pandey also said that India will blend around 8-8.5 per cent of ethanol with petrol in supply year 2020-21 (December to November) out of which around almost 13 per cent will come from non-sugarcane sources as feedstock while another 57 per cent from B-heavy molasses.

This will place the country on course to achieve a 10 per cent ethanol blending target by 2021-22 supply year and thereafter 20 per cent ethanol blending by 2025.

“If India manages to achieve 20 per cent ethanol blending by 2025, then it will lead to 30-35 per cent reduction in carbon monoxide, 20 per cent reduction in hydrocarbon, will divert around 16.5 million tonnes of surplus grains and also 6 million tonnes of excess sugar thus benefiting farmers,” Food Secretary Pandey said. EoM