Problem with ethanol blending isn't sugar — it's reliance on grains; the way forward, Pg11

Key Highlights:

• India's Ethanol Blended Petrol (EBP) programme was initially designed to support the sugar industry and cane farmers.
• The program has seen a significant shift in feedstock, with grain-based ethanol now dominating over sugarcane-based sources.
• In 2023-24, grain-based feedstock contributed 59.7% (402 crore litres) of the total 673 crore litres of ethanol supplied, achieving a 14.6% blending level.
• For the current supply year ending October 2026, grain-based feedstock is projected to supply 72.5% of the ethanol required for the E20 blending target.
• High sugar prices and low stock projections are expected to restrict ethanol production from direct cane juice or B-heavy molasses in the coming 2026-27 supply year.
• The program's increasing reliance is on rice, particularly surplus stocks from the Food Corporation of India (FCI), with 7.2 million tonnes allocated in July for ethanol production.
• The government has notified standards for higher ethanol blends, including E22, E25, E27, and E30, driven by increased distillery capacity.

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Detailed Insights:

• The EBP programme aimed to create an additional revenue stream for sugar mills, enabling them to make timely payments to cane farmers.
• Initially, ethanol was primarily produced from C-heavy molasses, a final byproduct of sugar processing.
• Incentives for ethanol from B-heavy molasses and direct cane juice/syrup led to an increase in ethanol supplies and blending levels between 2013-14 and 2018-19.
• The shift to grain-based ethanol, utilizing maize and rice (including FCI stocks), has become the mainstay of the program.
• The use of FCI rice for ethanol production raises concerns due to rice being a water-intensive crop and its sale at subsidized rates (Rs 23.2/kg to distilleries).
• Potential challenges in maize availability due to El Niño effects are expected to further increase reliance on rice for ethanol production.
• The original purpose of supporting sugarcane growers and providing demand for maize farmers is being overshadowed by the program's current trajectory.
• Suggested solutions include discouraging ethanol supplies from standalone grain-based distilleries reliant on FCI rice and promoting alternative crops like bajra and jowar.
• Another recommendation is to reconsider aggressive blending targets, with some experts suggesting a return to E10 petrol.

Key Concepts Involved:

• Ethanol Blended Petrol (EBP) Programme: A government initiative to blend ethanol with petrol to reduce crude oil imports, enhance energy security, and support the agricultural sector.
• C-heavy molasses: A thick, dark brown final byproduct of cane-juice processing, containing sucrose that mills cannot economically recover as sugar.
• B-heavy molasses: An intermediate-stage byproduct of cane-juice processing, from which some sugar can still be recovered, but is diverted for ethanol production with incentives.
• Food Corporation of India (FCI): A government agency responsible for the procurement, storage, and distribution of food grains in India.
• E20: A fuel blend consisting of 20% ethanol and 80% petrol, aimed at reducing fossil fuel consumption and emissions.
• El Niño: A climate pattern characterized by the unusual warming of surface waters in the eastern tropical Pacific Ocean, impacting global weather patterns, including rainfall.