Govt urges industry to boost ethanol output; assures purchase

Urging the industry to boost ethanol production, the government has said it is ready to purchase the entire output.
The development comes in the wake of the government making compulsory blending 10 per cent ethanol with petrol.
"Government is ready to purchase the entire quantity of ethanol produced by the industry. It could think of ways for economically viable production of ethanol," Union Road Transport, Highways and Shipping Minister Nitin Gadkari told ethanol producers.
Chairing a meeting of Indian Federation of Green Energy, the minister said ethanol could be a game changer as it is economically viable and environment-friendly.
He said the industry could find ways and means for boosting the production through molasses, bagass, corn or other means and the government was ready to buy the entire produce.

Citing the example of flex-fuel cars in Brazil, Gadkari said India was also on the way to promote such vehicles as this could minimise pollution.

"Under Ethanol Blending programme (EBP), the central government has scaled up blending targets from 5 per cent to 10 per cent to promote blending of ethanol with petrol and its use as alternative fuel," the government has said last year.
It has said the production cost of ethanol produced through C-heavy route from molasses is Rs 36.2 per litre.
The production of ethanol is linked to the production of molasses which is a byproduct during the production of sugar.

Parliament was recently informed that the government is also providing soft loans of up to 40 per cent of the project cost to sugar mills for setting up ethanol projects.
To augment supplies of ethanol to oil marketing companies (OMCs) under EBP, the policy for procurement of ethanol has been modified to smoothen the entire ethanol supply chain to provide remunerative price of ethanol.