Sugar mills lay down plan for 50% ethanol blending with petrol by 2030

Even as the ethanol blending programme faces challenges, sugar millers — in a recent presentation to the government — have laid down an ambitious road map to achieve 50 per cent average ethanol blending with petrol by 2030.

The plan envisages a cumulative investment of Rs 50,000 crore in ramping up distillation capacity. This will be over and above the already-lined-up amount of Rs 15,000 crore meant for achieving 20 per cent blending by 2025.

It also calls for the extensive launch of E-100 flex fuel vehicles (FFVs), which can run on 10-100 per cent ethanol-blended petrol.

For achieving annual average nationwide blending of 50 per cent by 2030, the total ethanol supplies required will be around 30 billion litres. Of this, around 15-16 billion litres will come from sugarcane-based molasses. The rest will be from damaged grains, maize and other sources, the plan said.

The road map said that production of 30 billion litres of ethanol domestically will lead to a foreign exchange savings of approximately $15 billion by 2030. It would cut down petrol imports and increase farmers’ income by around Rs 1.8 trillion.

The roadmap for 50 per cent average blending by 2030 has been prepared by the Indian Sugar Mills Association (ISMA). It was shared with senior government and NITI Aayog officials in a recent meeting.

The presentation also comes days before the first-ever launch of a 100 per cent ethanol-run car by the government.

In the 2022-23 ethanol supply year, which will end in October, the country had targeted to achieve a national average blending of around 12 per cent. It aimed to reach 20 per cent average national blending by 2025.

In 2022-23, around 5.5 billion litres of ethanol has been contracted for supply till early July. Of this, around 4 billion litres will come from sugarcane while the rest will be from grain-based sources.

Sources said that once the blending plan comes into place, all the surplus sugar in the system will go towards producing ethanol. So, there won’t be a need for exports to absorb the excess sugar.

“Our average sugar production in the last three years has been around 40-41 million tonnes while our domestic consumption is somewhere around 27.5-28 million tonnes. The remaining sugar of around 10-13 million tonnes is capable of producing around 15-16 billion litres of ethanol. This ethanol can be used to achieve an all India average of 50 per cent blending by 2030. This will also lessen dependency on exports and our own sugar can be entirely converted into ethanol,” ISMA President Aditya Jhunjhunwala told Business Standard.

Meanwhile, the millers also said that the E-100 fuel would cost around Rs 70 per litre with GST.

Meanwhile, on availability of feed stocks, Jhunjhunwala said that with regard to grain-based sources, the government needs to have a clear plan.

ISMA has commissioned a project jointly with the Sugarcane Breeding Institute in Coimbatore to develop sugarcane varieties, which can boost the current yield from 80 tonnes per hectare to 100 tonnes by 2030.