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Current Affairs

Bio-ethanol production

Date: 18 August 2020 Tags: Miscellaneous

Issue

The government has set targets of 10 percent bio-ethanol blending of petrol by 2022 and to raise it to 20 percent by 2030 under the ethanol blending programme to curb carbon emissions and reduce India’s dependence on imported crude oil.

 

Background

1G and 2G bio-ethanol plants are set to play a key role in making bio-ethanol available for blending but face challenges in attracting investments from the private sector.

 

Details

  • 1G bio-ethanol plants utilise sugarcane juice and molasses, by-products in the production of sugar, as raw material, while 2G plants utilise surplus biomass and agricultural waste to produce bio-ethanol.

  • Currently, domestic production of bio-ethanol is not sufficient to meet the demand for bio-ethanol for blending with petrol at Indian Oil Marketing Companies (OMCs). 

  • Many sugar mills which are best placed to produce bio-ethanol do not have the financial stability to invest in bio-fuel plants and there and there are also concerns among investors on the uncertainty o the price of bio-ethanol in the future.

  • The price of obtaining agricultural waste required for the production of bio-ethanol at 2G plants was currently too high for it to be viable for private investors in the country.

  • State governments needed to set up depots where farmers could drop their agricultural waste and that the central government should fix a price for agricultural waste to make investments in 2G bio-ethanol production an attractive proposition.

  • Government could provide greater visibility on the price of bio-ethanol that sugar mills can expect by announcing a mechanism by which the price of bio-ethanol would be decided.

  • The impetus for bio-ethanol uptake was driven by government worldwide, and a target that a certain percentage of ethanol blending be done using ethanol generated from 2G plants would help boost investment in the area.

  • 2G bio-ethanol will not only provide a clean source of energy but also help to provide greater income to farmers and prevent them from having to burn agricultural waste which can be a major source of air pollution.