Government opens 6-month window for sugar mills to submit ethanol proposals
The Center said on Friday it had opened a six-month window until October for sugar mills to submit new proposals to qualify for loans at a subsidized interest rate for the establishment of new distilleries or the expansion of facilities. to increase first-generation ethanol capacity in the country. .
To ensure that only serious project developers receive approval in principle from the Union Ministry of Food, a window has been opened for new applications from project developers who have acquired land for projects and obtained clearance. environmental, he said.
“The six-month window was open from April 21 to October 22,” an official spokesperson told PTI.
According to the Food Ministry, the decision will help sugar mills set up new distilleries or expand their existing distilleries and thus help divert excess cane/sugar into ethanol.
”New grain based distilleries would appear in deficit states like North Eastern states, Southern states like Tamil Nadu, Andhra Pradesh, Telangana and states like Bihar, Madhya Pradesh etc. . This would help with distributed ethanol production,’ the ministry said in a statement.
The government has been implementing a program since 2018 to provide concessional loans to sugar mills and distilleries with the aim of increasing ethanol production and supply under the Ethanol Blended with Petrol (EBP) program, in particularly during the surplus season and thus improve the liquidity position of the sugar mills enabling them to settle the price arrears of the farmers’ cane.
Under this scheme, the government provides financial assistance in the form of an interest subsidy of 6% per annum or 50% of the interest rate charged by banks, whichever is lower, on loans to be granted by banks for five years, including a one-year moratorium.
Ethanol capacity is being boosted to reduce the country’s dependence on imported fossil fuels, save foreign exchange on crude oil import bills, and reduce air pollution.
The government has set a target of blending 10% fuel-grade ethanol with gasoline by 2022 and 20% by 2025.
”…ethanol production capacities are to be increased to around 1700 crore liter to reach 20% blend by 2025. Opening the window would help increase ethanol production capacities”, the ministry said.
At present, the country has a total ethanol production capacity of 849 crore liters, which includes 569 crore liters from molasses-based distilleries and 280 crore liters from grain-based distilleries, he added. .
The production of fuel-grade ethanol and its supply to Petroleum Marketing Companies (OMCs) increased eightfold between 2013-14 and 2020-21.
In 2020-2021, it had peaked at 302.30 crore litre, reaching 8.10% blend. In the current 2021-22 year, 158 crore liters of ethanol have been blended into gasoline through April 17, reaching a blend of 9.77%.
A 10% blend target is expected to be achieved in 2021-22, he added.
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