On World Environment Day, June 5th 2021, the Government of India came up with the roadmap to ethanol blending by 2025. Petrol when blended with ethanol reduces pollution and costs. Currently, petrol used consists of 8.2% ethanol blended in it. The roadmap outlines a plan to increase this percentage to 20, by the end of 2025.
The majority of ethanol is produced using sugarcane, corn and grains. To achieve this goal, there is a need to rapidly increase the ethanol production capacity of India. It is estimated, 12 billion liters of installed capacity would be needed by 2025, to ensure a successful rollout of E20.
Ethanol production can be carried out either using molasses, which is a by-product of the sugar production process or by sugarcane itself. The current practice in India is to focus on ethanol production from molasses. Sugarcane being a seasonal crop, sugar mills are engaged in sugar production only for 6 months of a year. The other 6 months are utilized for ethanol production. Approximately mills have been producing 115 kg of sugar and 10 liters of ethanol from one tonne of sugarcane.
However, this would not be enough to meet the ethanol goals set for India. Mills can shoot up the production of ethanol by completely using sugarcane for ethanol production, instead of sugar. One tonne of sugarcane can produce 84 liters of ethanol if no sugar is made. These are not the only two options. Molasses usually goes through 3 stages, A, B and C. They can stop sugar production at any stage and then convert the rest into ethanol.
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The decision to shift from sugar production to ethanol involves several pros and cons to be considered. On one hand, ethanol produced will help the economy and the environment. 30% and 50% reduction in carbon emissions in 4 wheelers and 2 wheelers respectively can be achieved as it is a cleaner fuel. It will also result in a reduction in import bills as dependence on imported fuels reduces. It will also provide round the year employment to workers in the mills and those performing ancillary tasks, as ethanol production can go throughout the year, unlike sugar production. It can also help farmers receive their dues quickly as money is realized quickly through sales of ethanol as opposed to sugar. Investment in this sector further will help to build the rural economy.
At the same time, it will have an impact on the prices of sugar and sugarcane. It will drive up the prices of sugar as production dips and can potentially add to food inflation. The Indian government plans to shift 6 million tonnes of sugar towards ethanol production by 2025. It is equivalent to cutting down the export of sugar from India, leading to a loss of opportunity to earn foreign exchange. It will also result in a dip in sugarcane prices due to higher production. It has led to unrest amongst farmers.
Thus ramping up ethanol production in India continues to be a dilemma and is challenged by several obstacles. It has both advantages and disadvantages which is slowing down the process of adopting this change.
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