A trade association representing US ethanol producers said recently it wants to explore the possibility of supplying the bio-fuel for India’s ambitious ethanol-blending programme, which suffers from inadequate quantity.

“We are very much interested in participating in India’s clean fuel initiative, but New Delhi doesn’t allow the import of ethanol for fuel blending currently,” said Kurt Shultz, a senior official in charge of global strategies at US Grains Council (USGC), a trade body of US grain producers and businesses, said. Shultz was in the capital to participate in a maize summit organised by the Federation of Indian Chamber Of Commerce & Industry (FICCI).

Currently, USGC exports 50 million litres of ethanol to India, which is used for industrial applications. Ethanol supplied by sugar producers in the country is enough for around 4 per cent blending, whereas India has an ambitious plan to blend 10 per cent ethanol (E-10).

“Obviously, there is a shortage of ethanol in India. But at the same time India has an E-10 mandate, maybe an aspirational mandate. What is currently available in the country is not enough to meet this target,” Shultz said.

He said USGC would like to help close this gap. He suggested that India can first procure all that could be supplied by domestic producers and imports could be permitted subsequently to meet the shortage.

Win-win situation

This would be a win-win situation. It would help India to have eco-friendly fuel, run its ethanol refining infrastructure to optimum capacity round the year and more importantly, India can also save foreign exchange used for importing oil, he said.

Supply, cost factors

According to Amit Sachdeva, USGC’s representative for India, the landed cost for ethanol will be ₹29.55 per litre. Currently, oil marketing companies (OMCs) in the country are paying ₹40.85 to domestic ethanol suppliers.

Moreover, most of the refining capacity and related paraphernalia lies idle for a good part of the year as there is a shortfall in ethanol supply, Sachdeva said.

As per the government estimates, OMCs need 3.13 billion litres for meeting the E-10 mandate. However, as of end-December, Indian sugar and ethanol producers have entered into an agreement with OMCs to supply only 1.4 billion litres of ethanol, leaving a huge gap.

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