India on course to blend minimum 10% ethanol in 2021-22: Trade sources

Blending crossed 8.93% on Feb 16; trade sources say to achieve the 10% mark, 4.37 bn litres of ethanol are required of which 4.20 bn litres have already been offered via tenders and finalised by OMC

India is on course to achieve a minimum of 10 per cent average ethanol blending across the country in the current supply year, 2021-22, if the quantities offered and finalised so far by the Oil Marketing Companies and sugar firms are an indication, trade and industry sources said.

The number could top 10 per cent if all the proposed investments come on stream in time and the blending could be around 11 per cent once the new units start supplying ethanol.

Last year, India achieved an all-time high ethanol blending target of 8.1 per cent in 2020-21 supply year. The ethanol supply year runs from December to January.

To achieve 10 per cent blending in Ethanol Supply Year 2021-22, trade sources said that 4.37 billion litres of ethanol are required, of which 4.20 billion litres have already been offered through tenders and finalised for purchase by OMC.

“This is the situation as on date and also between January 2022 to November 2022, around 72 new distillers will come on stream, all of which will add to the quantity of ethanol supplied. Therefore, we are quite hopeful that by the time the year ends we will be able to achieve an annual average blending of 11 percent,” a senior industry official said.

So far, already 8.93 per cent blending has been achieved with the available quantities of ethanol and therefore the target of reaching 10 per cent looks realistic.

Data also shows that till February 16, according to available figures, Oil Marketing Companies have contracted 3.76 billion liters of ethanol in 2021-22 of which 0.74 billion liters have already been supplied.

In the 3.76 billion litres of ethanol contracted for supply, a bulk of the supplies around 63 percent will come from B-heavy molasses, followed by directly from sugarcane juice (18.54 per cent) and then from maize or corn (10.55 per cent).

According to trade sources, to achieve the 20 per cent blending target by 2025, India will need to produce 10-11 billion litres of ethanol, of which 6-6.5 billion litres will come from sugarcane, while the rest will have to be contributed by corn- and grain based sources.