Promise of partial energy security in ethanol blending

Powering automobiles through biofuels blended with conventional petrol is good. The progress in using non-conventional fuels from sugar plants for ethanol or from vegetable fats for biodiesel is due to breakthroughs in science, as well as evangelism of the political leadership. Ahead of its success in shale fracking for gas and oil, the US administration saw in biofuels a route to partial energy independence. Former president George Bush enacted laws that set minimum prices for biofuels and required refiners to step up annual sales. The growing use of biofuels in the US and Europe also has much to do with governments liberally providing funds for bioenergy research, energy efficiency grants and loans to build biofuel plants. In the US, ethanol produced from maize, unlike from sugarcane in Brazil or its by-product molasses in India, accounts for about 10 per cent of the overall petrol used by cars. Vegetable fat-derived biodiesel sees five per cent blending with conventional diesel in Europe. And, this is set to rise.

Indian sugar factories took time to respond to the government's ethanol blending programme (EBP), which began with five per cent mixing with petrol in September 2006; this was raised to 10 per cent in October 2008. While the country has sufficient capacity to meet the current EBP, new plants are being set up, following a government announcement that by 2017, EBP should rise to 20 per cent. While officials in the sugar sector want expeditious implementation of the Rangarajan committee recommendation of factories parting with 70 per cent of realisations from the sale of sugar and its by-products to cane growers, the latter have demanded India, like Brazil, should start making ethanol directly from cane.

Maharashtra peasant leader Raghunathdada Patil says, "In years of surplus cane crops, we have excess sugar production. The government is found wanting in ensuring sugar prices don't collapse under the weight of excess supply. In case the government allows the use of surplus cane to make ethanol, the chain of problems arising from excess sugar production will automatically be solved." Though this is an interesting idea, the subject has many ramifications, which call for deliberations by all stakeholders. The government, as a stakeholder and the agent to evolve consensus among farmers, factories and consumers on contentious issues, will have to consider to what extent its own revenue will be impacted if ethanol is made directly from cane. At the same time, biofuels have the potential to provide the country partial energy security. Cars burning ethanol will have less carbon footprint than is the case with fossil fuel.

Expectedly, the demand related to ethanol has first been raised by Maharashtra farmers, who have a preponderant presence in the state's sugar sector through 115 cooperative factories, with capacity to make about seven million tonnes (mt) of sugar a year, against the private sector's capacity of 1.537 mt. Maharashtra has 55 ethanol-making units, with a capacity of 526 million litres of the country's two-billion litre capacity. The movement, initiated by Patil, is gaining strength, as shown by Karnataka farmers joining the cause. When biofuels are made from cane, maize and fruit of oil palm (which are rich in sugar, starch and oil) on a major scale, a food-versus-energy debate is unavoidable. This has happened in the US, where ethanol plants use about 40 per cent of the maize crop. Malaysia, where palm fruit is used to make biodiesel besides palm oil, too, has seen such argument. If Brazil has managed to escape the debate, it is because the cane supply there is so plentiful that good production of ethanol saves sugar factories from being inundated by the crop. As we make ethanol from molasses, we, too, are spared the argument.

The Agriculture Trade Office of Brazil says ethanol production was 26.82 billion litres in 2013-14, up from 23.35 billion litres the previous year. The Latin American country has a mechanism to raise or lower the percentage of ethanol blending, depending on the size of the cane crop. A progressive increase in the use of Brazilian ethanol has been possible due to the country's automobile sector rising to the challenge of producing a wide range of flexible fuel vehicles, which run on any mix of ethanol and petrol. Following the Competition Commission dismissing a plea that supply of ethanol to oil marketing companies hurts the interest of chemical and liquor industries, EBP will, hopefully, see smooth sailing.