Oil Marketing Companies have announced a relief scheme on ethanol supplies for the third and fourth quarter of Ethanol Supply Year 2021-22 (December-November) based on feedstock.

The move is to encourage vendors to maximise ethanol supplies and help in meeting blending targets. The relief amount will incur a GST of 5 per cent, sources said.

For sugarcane juice, sugar or sugar syrup based ethanol, the relief amount has been fixed at ₹1,604 per kilolitre , for ethanol based on B-Heavy Molasses ₹1,493 per KL, C-Heavy molasses ₹1,179 per KL, for ethanol based on damaged foodgrains ₹2,337 per KL and for surplus rice based ethanol ₹1,437 per KL.

The relief scheme is applicable on all ethanol supplies invoiced to OMCs during June 1 to November 30, 2022. The amount will be paid after completion of each quarter for supplies invoiced by the vendor. To avail the amount vendors have to raise a separate invoice at the end of each quarter. There is no change in the basic price of ethanol from different feedstock, they added.

Ethanol blending

India has already achieved the target of 10 per cent ethanol blending five-six months in advance. The announcement was made by Prime Minister Narendra Modi on June 5. A day later, Minister of Petroleum and Natural Gas Hardeep Singh Puri said that 20 per cent ethanol blended petrol will be available at select petrol pumps in the country.

For the Ethanol Supply Year (ESY) 2021-22, the OMCs floated a tender for 459 crore litres of ethanol against which LoIs for 428.56 crore litres have been issued up to May 1, 2022. The companies have received 178.82 crore litres of ethanol enabling 10.66 per cent blending for the month of April and cumulative blending of 9.86 per cent.

For April 2022, 36 Letters of Intent (LoIs) have been issued under the SATAT scheme for CBG production, bringing the total to 3,218 LoIs. Four CBG plants have become operational during the month taking the total CBG plants operational in the country to 24.

Promoting Ethanol

The government is promoting ethanol-blended petrol with the objective of boosting the agriculture sector, reducing environment pollution and to bring down import dependency and enable savings in foreign exchange. In this direction, the National Policy on Biofuels 2018 was notified, which laid out the indicative target of 20 per cent blending of ethanol in petrol and 5 per cent blending of biodiesel in diesel by 2030.

Based on the encouraging initiatives on the supply side, the government advanced the target of 20 per cent blending of ethanol in petrol from 2030 to 2025-26.

It has also taken several measures to increase production and utilisation of ethanol, which includes permitting procurement of ethanol produced from other non-food feedstock besides molasses, like cellulosic and lignocellulosic materials like cotton stalk, wheat straw, rice straw, bagasse, bamboo, etc.

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