Sugar firms may seek govt nod to retail green fuel from their own premises

The plan is to convert sugar factories into full-scale 'green energy hubs'

To boost ethanol consumption and build an additional revenue stream, sugar factories are working on a plan to convert their manufacturing units into “green energy hubs” that will retail fuel doped with ethanol, produce and sell bio-CNG to meet local needs, and act as centres of multi-point access to energy for local consumers, a significant section of whom are likely to be farmers.

A basic blueprint of the proposal has been discussed among top industry 

officials and associations such as the Indian Sugar Mills Association (ISMA) and the National Federation of Cooperative Sugar Factories (NFCSF), officials said.

The ISMA is even looking at appointing a professional agency to conduct a feasibility and cost-benefit analysis of the proposal before approaching the Central government for financial assistance and other clearances.

The plan, according to ISMA President Aditya Jhunjhunwala, is to enable the 500-odd sugar mills across the country, located deep in rural areas, to set up fuel-retailing pumps that can dispense petrol mixed with ethanol, produce and sell bio-CNG for domestic consumers, and even provide fuel for electric vehicle-charging stations.

The pumps can dispense petrol blended with even more than 20 per cent ethanol if such flex-fuel vehicles are readily available in rural areas.

Talks have even started with leading makers of irrigation pumps to manufacture ethanol-based pump sets, which can source fuel from the plants itself.

“Each year we have thousands of tractors coming to our plants to deliver sugarcane. If they could get ethanol-blended petrol, that could be a good revenue source for companies and even save them the cost of transporting ethanol to depots operated by oil-marketing companies (OMCs),” Jhunjhunwala told Business Standard.

He said retailing and other services could be of great help to farmers within the catchment area of each sugar factory, which is 30-40 km.

Prakash Naiknavare, director general of the NFCSF, said blending now done at OMCs’ depots could happen at sugar factories, which would provide an additional revenue stream for the companies.

“We in the NFCSF are fully in support of the idea, which has also been backed by Road Transport Minister Nitin Gadkari in several interactions with the industry,” Naiknavare said.

Jhunjhunwala said if each of the sugar factories set up at least five fuel-retailing pumps on their premises it would mean 2,500 petrol pumps that could dispense petrol which has higher than a 20 per cent blend with ethanol.

“In Brazil there are vehicles that can run on 100 per cent ethanol and we have started talks with vehicle makers on developing tractors and other items that can do so,” Jhunjhunwala said.

He said when demand rose, the sugar sector could look at producing 10 billion litres of ethanol by diverting 10 million tonnes of sugar from its annual production.

The Plan

• ISMA and Cooperative Sugar Factories working on a proposal to start fuel retailing on company premises 
• Bio-CNG could be sold through the same factories directly to consumers as well 
• The proposals are part of the plan to convert sugar companies as ‘energy hubs’
• Plans afoot to appoint a dedicated agency to undertake a comprehensive analysis of the plan and prepare a proper project report