The government of India on Wednesday brought forward the target date for achieving 20 percent ethanol-blending with petrol by two years to 2023 to help reduce India's dependence on costly oil imports, according to an official notification.
"The Central Government hereby directs that the oil companies shall sell ethanol-blended petrol with a percentage of ethanol up to 20 percent as per the Bureau of Indian Standards specifications, in the whole of the States and union territories," the Oil Ministry said in a Gazette notification. "This Notification shall come into force with effect from the 1st April 2023".
Last year, the government had set a target of reaching 10 percent ethanol-blending in petrol (10 percent of ethanol mixed with 90 percent of diesel) by 2022, and 20 percent by 2030. Earlier this year, the target for 20 percent blending was brought forward to 2025. And now, it has been further advanced to April 2023.
Abinash Verma, Director General of Indian Sugar Mills Association (ISMA) said the notification says that 20 percent ethanol blended fuel sales will start in 2023. He added that it does not say that it is the only fuel that will be sold.
“As I read this notification, this notification of the ministry of petroleum says that we are going to sell 20 percent ethanol blended petrol across the country. It doesn’t say that we are going to do it compulsorily and the only fuel that will be sold is E20. So, what they are trying to say is that we are going to start selling E20 fuel from April 2023 and therefore we should be on target to achieve 20 percent all India average blending by 2025,” he said in an interview to CNBC-TV18.
India is the world's third-biggest oil importer, relying on foreign suppliers to meet over 85 percent of its demand. In the current ethanol supply year, which started in October, India plans to have 10 percent ethanol-blending with gasoline. As much as 4 billion litre of ethanol will be needed for achieving a 10 percent mixing ratio.
For 20 percent by 2023, 10 billion (1,000 crore) litre will be needed. The sugar industry will divert 6 million tonne of surplus sugar to produce 7 billion litre of the ethanol needed, while the remaining ethanol will be produced from excess grain.
Reacting to this, the sugar stocks have seen some support during the day. However, the sugar mills are skeptical of the requirement of ethanol to achieve the target by 2023. According to the mills, the 20 percent ethanol blending target by 2023 is far from real as the mills are required to double the ethanol capacity.
The current capacity is 425 crore litre and 50 crore litre capacity is in the pipeline which according to the sugar mills will be functional by the coming season. So, for this year, 325 crore litre of supply is what the mills are looking at. So, the sugar mills are likely to achieve 8.5 percent of blending in this year itself and 10 percent for next year is within reach.
“We are 100 percent sure that next year we should be achieving 10 percent ethanol blending. In the current season we have contracted for almost 323 crore litre i.e. 3.23 billion litre and therefore we should be achieving almost 8.5 percent blending on an average across the country,” Verma said.
In a bid to increase capacity, the government has also set rules for companies to set up standalone ethanol production facilities. It has also been giving soft loans to the mill to increase investment in ethanol.
With text input from PTI.
(Edited by: By Priyanka Deshpande)
First Published: IST