Enhancing Ethanol Blending in Petrol: Government Initiatives and Impact
Since 2014, the Indian Government has implemented numerous measures to boost ethanol blending in petrol. These initiatives aim to promote sustainable energy, reduce carbon emissions, and support agricultural communities. Here’s an overview of the key steps taken:
Key Government Measures
- Expanded Feedstock Options: The government has broadened the range of feedstock used for ethanol production, supporting diverse agricultural inputs.
- Administered Price Mechanism: A regulated pricing system for the procurement of sugarcane-based ethanol under the Ethanol Blended Petrol (EBP) Programme ensures fair compensation for producers.
- GST Reduction: The Goods and Services Tax (GST) rate on ethanol for the EBP Programme has been lowered to 5%, making the production process more cost-effective.
- Ethanol Interest Subvention Schemes (EISS): Between 2018-22, these schemes supported ethanol production from molasses and grains, encouraging investment in ethanol infrastructure.
- Long Term Offtake Agreements (LTOAs): Oil Marketing Companies (OMCs) have established agreements with Dedicated Ethanol Plants (DEPs), securing consistent supply chains.
- Pradhan Mantri JI-VAN Yojana: Launched in 2019 and amended in 2024, this program provides financial support for integrated bio-ethanol projects using advanced biofuels and renewable feedstocks.
- Biodiesel Blending Initiatives: Government has issued guidelines for biodiesel blending with high-speed diesel. Also, it reduced the GST rate on biodiesel for blending from 12% to 5%.
- National Policy on Biofuels: The 2018 amendment mandates a 5% blending of biodiesel in diesel, promoting greener fuel alternatives.
Promoting Compressed Biogas (CBG)
The government supports CBG production with financial aid for biomass procurement and pipeline infrastructure development. Government has mandated CBG sales in Compressed Natural Gas (Transport) and Piped Natural Gas (Domestic) segments to enhance its adoption.
Impact of Ethanol Blended Petrol (EBP) Programme
During the Ethanol Supply Year 2023-24 (as of 30.09.2024), the EBP Programme has led to significant achievements:
- Financial Benefits: Farmers received approximately Rs 23,100 crore, aiding rural economies.
- Foreign Exchange Savings: The program saved over Rs 28,400 crore in foreign exchange.
- Crude Oil Substitution: Ethanol substituted more than 43 lakh metric tonnes of crude oil.
- CO2 Emission Reduction: The program resulted in a net reduction of about 29 lakh metric tonnes of CO2 emissions.
These measures highlight the government’s commitment to promoting ethanol blending, enhancing energy security, and fostering environmental sustainability.
Government Initiatives for the Promotion of Biofuels
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