Nitin Gadkari, Union Minister, Road Transport & Highways shared his views with AgroSpectrum on how the production of biofuels can bolster the growth of the agriculture industry. Edited excerpts;
The Government of India has proposed a target of 20 per cent blending of ethanol in petrol and 5 per cent blending of biodiesel in diesel by 2030 and introduced multiple initiatives to increase indigenous production of biofuels. The promotion of E20 fuel is part of the country’s plans to cut its oil imports and reduce pollution. It is also a move that will benefit sugarcane growers. To increase the production of fuel-grade ethanol, the government is planning to encourage distilleries to produce ethanol from maize and rice stocks available in state-held granaries run by the Food Corporation of India (FCI). Nitin Gadkari, Union Minister, Road Transport & Highways shared his views with AgroSpectrum on how the production of biofuels can bolster the growth of the agriculture industry. Edited excerpts;
How will the diversification of agricultural crops for energy and fuel help the agri sector?
When India got independence, the main challenge of the farmers was to produce enough food grains for the people of the country. Now, with the efforts of our farmers, not only has the country become self-sufficient in food supplies but also we are able to export large quantities of food grains every year. Its farmers are producing a surplus of food grains, fruits and vegetables in the country, surpassing the required consumption in the country.
This increase in agricultural produce compels us to think about its diversion towards converting into energy and fuel. Until farmers are unable to produce raw material for basic fuel in their farms, the dream of ‘Atmanirbhar Bharat’ will remain a dream. Each year more than required sugar for consumption is being produced, but if we divert the surplus sugar towards making ethanol, then we will be able to get a good alternative to crude oil.
Food godowns of the country are stuffed with surplus rice. Paddy is being produced in large quantities that is adding surplus stock every year. The country has 40 lakh metric tonnes (MT) of surplus food grains. Additionally, 20 lakh tonnes of maize is also lying surplus in the godowns. All these crops can be very efficiently utilised for producing a good quantity of ethanol.
In 2013-14, 38 crore litres of ethanol was produced from molasses. Whereas, the target for current year is approximately 320 crore litres. What’s astounding is that till June 2021, 180 crore litres of ethanol has already been produced. To meet the requirement of E-20 we have set a target of producing 1500 crore litres by 2025. We need to think in this direction for converting surplus agricultural produce into biofuel and energy.
How will the rural economy get a boost by increasing ethanol production?
Presently we are importing crude oil to meet around 85 per cent of our requirement which amounts to $55 billion, equivalent to Rs 4,25,000 crore. When we talk about an increase in the blending ratio of ethanol, the money spent for import of crude oil is saved. We also save foreign exchange, that’s why I always say that ethanol is an indigenous import substitute for pollution free green fuel. The best part of ethanol is that it is being produced by using agricultural produce. When farmers are producing such crops to be used for making ethanol, then automatically we will save approximately Rs 30,000 crore of foreign exchange, which in turn will go to the farmers. This way, the dream of ‘Atmanirbhar Bharat’ can be realised. As a result, the exchange rate of the rupee can also be strengthened against every foreign currency.
How will the farmers benefit from increasing ethanol production?
The clear fact is that each and every raw material required to produce ethanol or Biodiesel is cultivated and produced by farmers. Therefore, the major share of the value addition of Rs 2,00,000 crore, say up to 70 per cent, will go into the pockets of farmers.
What strategies are being deployed by the government to produce biofuels on a large scale to fulfil the demand?
On June 4, 2018 the government had prepared an ambitious plan called the National Policy on Biofuels, to facilitate 20 per cent blending of ethanol. This policy document provided a basic action plan to achieve the target of 20 per cent blending by 2030. This year, on World Environment Day, our Prime Minister has reconfirmed India’s determination to have clean and green fuel and preponed the target of 20 per cent blending by 2025.
Best Rates of Ethanol in the World
Brazil, USA, Thailand, etc. are larger producers of ethanol as compared to India. In these countries the basic price of ethanol is approximately Rs 43.88, Rs 44.41 and Rs 49.55 per litre, respectively. The Indian government has recognised six different sources to produce ethanol and rates for ethanol made out of these six types of raw materials are different. These vary according to the raw material being used. For instance, Rs 62.65 per litre is the price when we use sugarcane juice for conversion to ethanol, Rs 57.61 per litre for using B Molasses, Rs 45.69 per litre for C Molasses, Rs 51.55 per litre for damaged food grains and Rs 56.87 per litre for surplus rice taken from FCI. To promote ethanol production, the Government of India has fixed highest rates across the globe. This will certainly boost the ethanol production in the country.
Interest Subvention
To further promote the investment for capacity building for ethanol production, the government has proposed a 6 per cent interest subsidy on the investments. Under this scheme, more than 350 distilleries will get 6 per cent approximately Rs 6000 crore.
BIS for E12 & E15
Earlier, only 10 per cent blending was permissible in the country. States like Maharashtra, Uttar Pradesh and Karnataka had achieved this target long ago. The production capacity of these states is much more than the ethanol required for 10 per cent blending. But, considering 10 per cent cap additional capacity remained unutilised. Looking at the potential of these states, the Government has revised the standards for E12 and E15 on June 3, 2021. This 12 per cent, 15 per cent and 18 per cent blending is a roadmap to achieve 20 per cent blending by 2025.
Augmenting Infrastructure of OMCs
Oil Marketing Companies (OMCs) are preparing for the projected requirement of ethanol storage, handling, blending and dispensing infrastructure. OMCs are augmenting their tankage capacity at supply locations, replace plastic equipment of dispensers, and build more dispensing stations for E20, and E10 petrol.
With the current storage capacity of 17.80 crore litres we can handle about 430 crore litres of ethanol annually, considering storage of production equivalent to 15 days.
Similarly, with the additional planned capacities of 26.84 crore litres by 2025, the total tankage capacities will be 44.64 crore litres, which will handle about 1060 crore litres of ethanol annually considering storage of production equivalent to 15 days.
Government is planning to implement 100 per cent bio-ethanol in the automobile industry in a big way. What are the plans of the Ministry of Road & Transport to facilitate this implementation?
In the month of March 2021, I asked automakers to build flex-engine vehicles. These engines can run using any ratio of blended ethanol ranging from 20 to 100 per cent.
The Ministry of Road Transport & Highway (MoRT&H) has notified BS-VI emission norms in Central Motor Vehicle Rules 1989 which are applicable to all vehicles post April 1, 2020. Newer vehicles on E20 will have to meet BS-VI norms. MoRT&H has notified GSR 156(E) on March 8, 2021 for adoption of E20 fuel as automotive fuel and issued mass emission standards for it. MoRT&H has also notified Safety standards for ethanol blended fuels vide GSR 343(E) dated May 25, 2021 on the basis of Automotive Industry Standard (AIS 171). It lays down safety requirements for type approval of pure ethanol, flex-fuel and ethanol-gasoline blended vehicles in India.
Flex Fuel Engine technology (FFE) is a well-accepted concept in Brazil, representing over 80 per cent of the total number of new vehicles sold in the country (2019). The Flex fuel vehicles used in Brazil operate with E27 or E100 Hydrous ethanol or any blend between these two. The vehicle technologies for ethanol are already proven along with the compatible fuel system globally. So, the selection and optimisation of technology for the engine has to be undertaken considering the availability of fuel ethanol.
Regulatory Status of Ethanol as a Fuel:
(i) E5 [blending 5 per cent Ethanol with 95 per cent gasoline was notified in GSR 412(E) dated 19.05.2015 by MoRT&H. The rubber and plastic components used in gasoline vehicles produced since 2008 are compatible with E10 fuel.
(ii) E10 [blending 10 per cent Ethanol with 90 per cent gasoline was notified in GSR 881(E) dated 26.11.2019 by MoRT&H. The rubber and plastic components used in gasoline vehicles are currently compatible with E10 fuel.
(iii) The use of E85 (85 per cent ethanol by volume) was notified in GSR 682(E) dated 12.07.2016 for 4 wheeler vehicles, 3 wheelers and 2 wheelers. E100 (pure ethanol) for use in gasoline vehicles and ED95 [95 per cent ethanol and 5 per cent additives (co-solvent, corrosion inhibitors and ignition improvers)] for diesel vehicles have also been included in the same notification. The emission standards of E85 and E100 fuels have also been notified.
Ethanol production from sugarcane, wheat, rice and corn has already been started in India. Are there any other viable ways through which ethanol can be produced? Has the government validated any technology for the production of biofuels?
Molasses is recognised as the basic raw material for ethanol production, but in the last few years, standalone grain-based distilleries have also come forward to produce ethanol. In the current year, till June 2021, 160 crore litres of ethanol has been produced by using sugarcane and approximately 20 crore litres have been produced by using surplus rice and damaged food grains/maize. If we have to achieve the target of E20, then India needs to produce 1500 crore litres of ethanol every year by 2025. To achieve this production target 760 crore litres of ethanol can be made with sugarcane and for balance 740 crore litres of damaged food grains/maize can be utilised. Substantial quantities of barren and rain fed land can be brought into cultivation for maize in particulars. This technology of making ethanol by using food grains/maize is proven and tested.
What inputs are required for the growth of the biofuel industry in India?
Ethanol Blending with Diesel:
This year we have imported 1850 lakh MT petroleum of around $55 billion. To reduce this we need to increase usage of Ethanol, Compressed Natural Gas (CNG) and Electric Vehicles (EVs). In the very near future we should have target ethanol blending in diesel as well apart from petrol.
Tax Benefits:
Globally, vehicles compliant with higher ethanol blends are provided with tax benefits. A similar approach may be followed so that the cost increase due to E20 compatible design may be absorbed to a certain extent, as is being done in some states for promoting EVs.
In order to bring predictability and to encourage investment by entrepreneurs in terms of expansion/new ethanol capabilities, the government may declare a floor price of ethanol for five years with an escalation clause for purchase by OMC’s.
How will the Government make an ethanol economy of Rs 2 lakh crore in the next five years?
As we have preponed 20 per cent ethanol-blended petrol to 2025, this will increase our demand by 1000 crore litres more. This becomes a Rs 65,000- 75,000 crore economy. On the other hand, ethanol blended diesel, E100, flex fuel vehicles will shoot up the economy and it will cross Rs 2, 00,000 crore within five years.
Dipti Barve dipti.barve@mmactiv.com
Nitin Gadkari, Union Minister, Road Transport &
