The percentage of ethanol blended with petrol during November 2023 fell to 10.24 per cent from 12.38 per cent during October. November is the first month of the ethanol supply year 2023-24.
“Ethanol blending with petrol during November 2023, the first month of the Ethanol Supply Year (ESY) 2023-24, stood at 10.24 per cent, as compared to 12.06 per cent during the ESY December 2022-October 2023,” the Petroleum Planning and Analysis Cell (PPAC) said in its latest report.
During ESY 2022-23, the OMCs floated a tender for 599.7 crore litres of ethanol, against which letters of intent (LoIs) for 567 crore litres were issued. During the year, surgarcane juice accounted for 25 per cent of the ethanol production, B-Heavy molasses (45 per cent), C-Heavy molasses (1 per cent) and foodgrains (29 per cent).
The oil marketing companies (OMCs) saved around 509 crore litres of petrol on account of ethanol blending during ESY 2022-23, resulting in savings of more than Rs 24,300 crore in foreign exchange and payments of about Rs 19,300 crore to farmers.
India achieved the target of 12 per cent blending of ethanol with petrol in ESY 2022-23, and 10 per cent blending in ESY 2021-22.
Steep blending target
The Ministry of Petroleum and Natural Gas (MoPNG) has targeted 15 per cent blending in ESY 2023-24 (November 2023-October 2024).
However, it is unlikely to meet the blending target as the government has prohibited the use of sugarcane juice and sugar syrup to produce ethanol.
According to India Ratings and Research (Ind-Ra), the move is likely to affect the ethanol blending rate in the country.
“While there is likely to be an increased focus on production through grain-based sources, Ind-Ra believes blending could fall below 10 per cent in ESY 2023-24 in the absence of cane juice-based ethanol, against the government’s target of 15 per cent. After a secular rising trend over the past five years, this would be a setback for achieving the target of 20 per cent ethanol blending in petrol by ESY 2025-26,” Ind-Ra added.
Sugar mills’ ₹15,000-crore investment at risk after ban on cane juice for ethanol
However, the Food Ministry, in a new order on Saturday, said OMCs will decide on the quantity of ethanol they intend to purchase from each distillery, mentioning how much biofuel is to be made from which feedstock. Now OMCs will issue a revised allocation of sugarcane juice and B-Heavy Molasses based ethanol for ESY 2023-24.
India’s ethanol production capacity of 1,364 crore litre is spread across the country, including in the ethanol surplus states of Uttar Pradesh, Maharashtra and Karnataka.