Need sugar-ethanol price parity to achieve 10% blending, say experts

India can achieve its 10 per cent ethanol blending target with petrol if there is price parity between sugar and ethanol, industry experts said on Monday.

In 2019-20 sugar season, ethanol blend with petrol is expected to be around 5 per cent, much less than the targeted 10 per cent by 2022, largely due to falling sugarcane production and improvement in price realisation. 

Speaking at a two-day seminar on Sustainability Mobility-Ethanol Talks, organised by the Indian Sugar Mills Association (ISMA) and its Brazilian counterpart UNICA, global ethanol expert Plinio Nastari said a long-term price policy was required to define the ethanol-versus-sugar parity, which would give visibility to the investors for making investment to boost production capacity.

Lack of ethanol production capacity is the main hurdle in achieving the target. Brazil, the world's leading sugar producer, is a pioneer in ethanol blending with petrol and achieved more than 25 per cent.  

Luis Henrique Guimaraes, president and chief executive officer of Raizen, one of the world’s biggest ethanol producers, said global market for ethanol needed to be created.

Vivek M Pittie, president of ISMA, said India would find it difficult to meet its target of 10 per cent ethanol-blending with petrol just on the back of B- and C-heavy molasses. “It can only be achieved from direct ethanol production from sugarcane juice,” said Pittie.