RIL plans ethanol production foray

Mukesh Ambani-controlled Reliance Industries (RIL) is keen on making a foray into the blended-fuel segment through the sale of 5 per cent ethanol blended petrol.

The company may enter into an agreement with farmers' organisations of Maharashtra to buy sugarcane for entering into large scale production of ethanol.

RIL officials refused to comment on the development. However, according to sources, RIL is in talk with farmers to get adequate quantity sugarcane for its ethanol project.

The company is likely to set up an ethanol extraction plant at Kurkumbh in Pune, near its mono-ethylene glycol production unit, which has a capacity of 80,000 tonne per annum (TPA).

Though ethanol is a byproduct of molasses while manufacturing sugar, RIL may be setting up the plant with a technology for converting the complete production into ethanol.

"RIL has offered Rs 1,500 per tonne for sugarcane to the farmers of Pune, which is higher than the price offered by co-operative societies in this region. The maximum price offered for sugarcane in the state is between Rs 1,200-1,250 per tonne," said market sources.

After introducing blended petrol in Maharashtra market, RIL might expand the business across the country.

Indian Oil Corporation (IOC), on behalf of all state-owned oil marketing companies, signed an agreement with the Indian Sugar Mills Association (ISMA) for sustained offtake of ethanol for blending it with petrol.

According to sugar industry sources, ethanol deliveries have commenced but among the three oil marketing public sector companies IOC alone has started purchasing.

Ethanol mixing has not been made mandatory in India owing to the fear of shortfall in sugar production.

But the central government has given the go-ahead with projects supplying ethanol-blended petrol across the country from the next sugarcane crushing season beginning October.

The most common blends contain 10 per cent ethanol and 85 per cent petrol. In India, only only 5 per cent ethanol blend is allowed. Since ethanol is produced from plants that harness the power of the sun, it is also considered a renewable fuel.