Ethanol Blending Programme in India

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Under Ethanol Blending Programme (EBP), the Central Government has scaled up blending targets from 5% to 10% to promote blending of ethanol with petrol and its use as alternative fuel.

current affairsPresently, 156 units are producing molasses based ethanol with annual installed capacity of approximately 224 crore litres.

21 distilleries with sugar factories produce only alcohol requiring up gradation for ethanol production capacities.

12 more ethanol production facilities are being set up in different states.

Soft loans up to 40% of the project cost is provided to the sugar mills from Sugar Development Fund (SDF) for setting up ethanol projects.

At present, ethanol produced from molasses is not cheaper than motor spirit at refinery gate. However, to achieve the objectives of the National Bio-Fuel Policy, with a view to encourage production/usage of ethanol, the Central Government apart from scaling up blending targets has also fixed remunerative ex-depot price of ethanol and waived excise duty on its supplies to OMCs during 2015-16.

Representations regarding pricing of ethanol for supplies under EBP have been received from industries representing chemical sector. The matter is presently sub-judice.

Production of ethanol and its supplies under EBP at remunerative prices are likely to improve the liquidity position of sugar mills enabling them to clear cane price dues of farmers.

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