Ethanol Blended Petrol (EBP) Programme

Ethanol Blended Petrol (EBP) programme was launched in 2003 by the Ministry of Petroleum & Natural Gas (MoP&NG) .

With a view to limit sugar production in the Country and to increase domestic production of ethanol, Government has taken multiple steps including, allowing diversion of B heavy molasses, sugarcane juice, sugar and sugar syrup for ethanol production.

Blending of Ethanol with Petrol reduces pollution, helps in conserving foreign exchange and increases value addition in the sugar industry thereby enabling them to clear cane price arrears of farmers.

As the Fair and Remunerative Price (FRP) of sugarcane and ex-mill price of sugar have undergone changes, there is a need to revise the ex-mill price of ethanol derived from different sugarcane based raw materials.

 

Government has been implementing Ethanol Blended Petrol (EBP) Programme wherein Oil Marketing Companies (OMCs) sell petrol blended with ethanol up to 10%.

This programme has been extended to whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands with effect from 01st April, 2019 to promote the use of alternative and environment friendly fuels.

This intervention also seeks to reduce import dependence for energy requirements and give boost to agriculture sector.

For the first time during 2018, differential price of ethanol based on raw material utilized for ethanol production was announced by the Government which has significantly improved the ethanol procurement by Public Sector OMCs.

National Biofuel Policy -2018 envisages an indicative target of 20% blending of ethanol in petrol to be achieved by 2030.

The ethanol blending depends on the availability of ethanol which further depends on availability of raw material for ethanol production viz, sugarcane, damaged food-grains unfit for human consumption, etc. and supply demand scenario in other ethanol consuming sectors like potable alcohol, pharma, chemical, petrochemicals, etc

Categories of Biofuels

First generation bio-fuels: These are made from food sources such as sugar, starch, vegetable oil, or animal fats using conventional technology which include Bio-alcohols, Biodiesel, Vegetable oil, Bio-ethers, Biogas etc.

Second generation bio-fuels: These include cellulose ethanol and biodiesel which are produced from non-food crops or portions of food crops that are non-edible and considered as wastes, e.g. stems, husks, wood chips, and fruit skins and peeling.

Third generation bio-fuels: These are produced from micro-organisms like algae which include Butanol.

Fourth Generation Bio-fuels: These are produced from crops that are genetically engineered to take in high amounts of carbon are grown and harvested as biomass.  Their production actually pulls out carbon from environment.

Challenges in implementing the Bio fuel policy

Food security concerns: Mass diversion of fertile arable land for export driven Bio fuel production might create supply shortage of food grains thereby inducing artificial food inflation.

Raw Material: Presently there is no mechanism for depots where farmers could drop their agricultural waste like molasses, paddy wastes. Hence there is a dire need for efforts to incentivize farmers to sell their produce for bio fuel production.

Efficient procurement: Majority of ethanol produced is procured by major distilleries and Alcohol based chemical industries which creates scarcity situation for Ethanol based blending.

Infrastructure: Good investment is required in the field of setting up of Bio fuel based refinery and supporting infrastructure.

Ecological concerns: Genetic variants of high calorific value bio ethanol crops might be water intensive and reduce the crop diversity.

Technology constraints: Nascent technologies in the Bio fuel sector discourage many green field investments in the sector. Hence modern and sophisticated technologies are needed.

Advantages of Bio-fuels:

Relief on the exchequer: India meets 80% of its energy demand through costly overseas imports of crude oil which causes huge drain to Forex reserves as well as our resources. This can be avoided by augmenting locally available energy alternatives.

Ecological benefits: Combustion of Bio fuels emits 60% less carbon dioxide as well as there will be drastic reduction of other green house gases.

Waste management: New research on converting waste into bio fuel will address the ever burgeoning problem of urban waste management.

Augments Farmers income: Bio fuel production helps the already distressed farm sector with alternate source of income.

Employment generation: Energy production produces large scale skilled as well as non skilled employment generation opportunities.