Poor storage infra at OMCs hurting supplies, say grain ethanol makers

The grain-based ethanol makers have complained that they are being forced to shut down some of their units as inadequate decantation and tankerage infrastructure at the depots of oil marketing companies (OMCs) is affecting the supply chains.

The Grain Ethanol Manufacturers Association (GEMA), in a recent letter to the Ministry of Petroleum and Natural Gas, also said that all the existing storage facilities at the units are full and no further tankerage is available.

Decantation is the process of separating a solid and liquid mixture, or separating mixtures of immiscible liquids.

The letter also alleged that the storage and decantation facilities available with the OMCs is not even sufficient for meeting the requirements of 12 per cent blending while the government has targeted to blend 15 per cent ethanol with petrol in the 2023-24 Supply Year that started in November.

 

The letter said that grain-based ethanol makers have so far put up an annual capacity of four billion litres, which will go up to 6 billion litres by the end of Fy-2024-25.

Meanwhile, data showed that till end of March 31, 2024 that is in the first five months of the 2023-24 Ethanol Supply Year that started in November, India has achieved a national average blending of 11.96 per cent.

Out of the total required 6.22 billion litres of ethanol for 2023-24, till March 31, 2024 around 2.24 billion litres have been received.

Of this, sugarcane-based sources have contributed around 1.26 billion litres (around 56.25 per cent) while grains based sources have contributed 0.98 billion litres. India has targeted to blend 20 per cent ethanol with petrol by 2025.

Ethanol is produced largely from sugarcane-based molasses or grain-based sources as feedstock in India.

In sugarcane, it is either through sugarcane juice or syrup, then B-heavy molasses and C-heavy molasses. There is a different procurement price for ethanol produced from each source.


Ethanol Supply Chart

Feedstock	Qty Received*	Qty Contracted*
Sugarcane-based	1.26	1.52
Grain-based	0.98	1.68
Total	2.24	3.2
*From Nov 1 2023 to March 31, 2024 in billion litres

Source: Trade and Industry sources