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Economy, Geography
Mahesh

04/02/25 10:38 AM IST

Production of ethanol

In News
  • Union Minister Nitin Gadkari said that India will achieve its target of 20% ethanol blending of petrol in the next two months, at least a year ahead of what was originally planned.
Ethanol
  • The 1,100 crore litres of fuel ethanol will come from sugar and high grade molasses, Food Corporation of India (FCI) rice, broken rice, and maize.
  • India’s ethanol distillery capacity has ramped up to 1,600 crore litres, driven by a range of government incentives and the promise of a stable, lucrative market. 
  • Sugar is expected to provide some 400 crore litres this ethanol year.
  • India had closing sugar stocks of around 80 lakh tonnes in October 2024.
  • The projected sugar production for next year is around 315 lakh tonnes out of which 40 lakh tonnes will go to fuel ethanol.
  • Ethanol for non-fuel uses will come from low grade molasses called C Heavy that don’t go into sugar production.
  • The government recently decided to reduce the price of FCI rice to distilleries from ₹28 to ₹22.5 per kg.
  • The government handout states that some 110 crore litres of ethanol will be produced from FCI rice this ethanol year.
  • This means almost 400 crore litres of fuel ethanol should come from maize.
  • For context, India was producing little or no ethanol from maize until 2020.
  • Besides pure-play grain-based distilleries coming up, some sugar distilleries have modified to dual-feed so in the off-season they can use other feedstock (maize) to produce ethanol. 
Production of Maize
  • India’s maize production is just about enough for traditional needs such as for the poultry sector, livestock feed, starch production and some 10% for human consumption.
  • As the government had imposed curbs on allowing sugar and high quality molasses for ethanol production, maize imports started ramping up in April 2024.
  • From April to June, approx. ₹100 crore worth of maize was imported while, for 2023-24, maize imports were approx. $33 million.
  • Ministry of Commerce figures show that a total of $188 million worth of maize was imported from April to November 2024.
  • The promise of a steady, lucrative ethanol market has meanwhile goaded many farmers to take to maize cultivation across India.
  • The major maize producing States are Karnataka, Madhya Pradesh, Maharashtra, Andhra Pradesh, Rajasthan, Bihar, and Uttar Pradesh.
  • For the 2024-25 ethanol year, maize output would be some 42 million tonnes out of which nine million can go towards producing the 350 to 400 crore litres of ethanol.
  • Since 2020-21. when ethanol production was almost all sugar-based, maize production had increased by nearly six million tonnes in three years, for potential ethanol use.
  • Maize is cultivated in 10% more area at a higher yield.
  • The long-term sustainability of fuel ethanol would depend on whether the switch to ethanol and stress on maize has a negative impact on production of other foodgrains.
  • 100 crore litres of fuel ethanol translates to ₹6,000 crore savings on oil imports and the money going into the internal economy including to farmers. For context, India’s yearly oil import bill is some ₹10.5 lakh crore.
Source- The Hindu

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