By Sandeep Wasnik
Today’s global trend towards increased use of environmentally friendly fuels (Ethanol) is likely to gather pace. Brazil which is the second-largest ethanol producer after the United States in the world is home to the world’s largest fleet of cars that use ethanol. Ethanol is derived from sugarcane as an alternative to fossil fuel-based petroleum.
India is the second-largest producer of sugar after Brazil in the world and sugar production during the last few years has remained 24-26 million tons. A surplus sugar stock with a stronger financial incentive to convert excess sugar to ethanol should help the oil marketing companies procure upwards of 2.4 billion litres in 2019. This will help to achieve its highest fuel Ethanol blending in petrol penetration at 5.8 per cent, compared to last year’s record of 4.1 per cent.
Ethanol blending with petrol is pegged to touch 7 per cent as shown in info-graph.
To address environmental concerns due to fossil fuel burning, provide remuneration to farmers, the Indian government launched Ethanol Blended Petrol (EBP) programme in 2003 for undertaking blending of ethanol in Petrol. This initiative was also undertaken to subsidize crude imports and achieve forex savings. Presently, the EBP programme is being run in 21 states and 4 Union Territories of the country. In India, ethanol is primarily manufactured via the fermentation of molasses, a by-product of the sugarcane-crushing process. India has 330 distilleries, which can produce more than 4.8 billion litres of rectified spirit (alcohol) per year. Out of 330 of distilleries, nearly 166 distilleries have the capacity to distil approximately 2.6 billion litres of conventional ethanol per year In 2019, The Cabinet Committee on Economic Affairs (CCEA) approved Pradhan Mantri JI-VAN (Jaiv Indian- Vatavaran Anukool fasal awashesh Nivaran) Yojana which aims to provide financial support by Viability Gap Funding (VGF) to Second Generation (2G) Integrated Bioethanol Projects. This is done by using lignocellulosic biomass and other renewable feedstock.
The Pradhan Mantri JI-VAN Yojana will be supported by the total financial outlay of Rs 1959.50 crore for the period 2018-19 to 2023-24. Rs 1800 crore has been allocated for supporting 12 commercial projects, Rs 150 crore for 10 demonstration projects and the balance Rs 9.50 crore will be provided to Centre for High Technology (CHT) as administrative charges The government has also been exploring an alternate route of encouraging the production of second-generation ethanol from biomass and other wastes to bridge the supply gap for ethanol blending programme. The introduction of this fuel has not only environmental benefits but also addresses the country’s energy security.
In 1975, National Alcohol Programme, “Proálcool” was introduced by the Brazilian government, after the introduction of this programme, within 6 years; nearly 90 per cent of all the new vehicles sold in the country could run on ethanol. Proálcool programme accelerated ethanol production and today Brazil has become the second-largest ethanol producer in the world. End of December 2019, nearly 34.45 billion litres ethanol production has been estimated in Brazil.
In January 2020, during Brazilian President Jair Bolsonaro’s official visit India, ethanol will be on the agenda for discussion. The Brazilian government is expected to offer ways to assist India in boosting its ethanol program, such as increasing production and blending ethanol with petrol, which could help reduce the country’ sugar stocks, reduce Crude oil imports, reduce pollution in large cities and boost global prices for the sweetener.
Recently, the Union Cabinet, chaired by the Prime Minister Narendra Modi has given its approval for signing of Memorandum of Understanding (MoU) between India and Brazil on Bioenergy Cooperation. This MoU provides a framework to cooperate and promote investment in biofuel, bioelectricity and biogas supply-chains, including feedstock, industrial conversion, distribution and end-use sectors. Few other salient features of the MoU included are reducing greenhouse gas emissions by using Biofuels, Engine and fuel modification that may be necessary for requiring Biofuel blend with fossil fuels.
India has a strong focus in the area of biofuels and stipulated an ethanol blending target of 10 per cent by 2022 and 20 per cent by 2030, while biodiesel blending target has been set at 5 per cent by 2030 when it had announced a new policy on Biofuels in 2018.
Now, the Indian Automobile sector not only needs to focus on Electric Vehicles (EVs) but also on Flexi-fuel engine. Today, nearly 44.8 million cars are running on Brazilian road, where 75 per cent of the total can run on a mixture of ethanol and gasoline due to its flexible fuel engine. Brazilian flexible-fuel vehicles are optimized to run on any mix of E20-E25 gasoline (E20 contains 20 per cent ethanol and 80 per cent gasoline, while E25 contains 25per cent ethanol) and up to 100 per cent hydrous ethanol fuel (E100). On the other hand, Indian Automobile sector needs to work on the flexible-fuel engine or flexible-fuel-vehicles technology and safety, which is also helping to reduce greenhouse gas emissions and reduce the hiking in fuel price trend.
(The author is Latin America and the Caribbean Countries Market Expert. Views expressed are personal.)
Source: Financial Express