India can save $6 bn through ethanol-blended fuel by 2021-22: Report

This can be done only if India achieves the targeted 20 per cent ethanol mix in transportation fuel according to the scheduled timeline

India can save precious foreign exchange to the tune of $6.12 billion from its oil import bill by 2021-22 if it achieves the targeted 20 per cent ethanol mix in transportation fuel according to the scheduled timeline, a report said on Friday.

The study on 'Fuel Blending in India - Learnings and Way Forward' has also projected that a reduction in carbon dioxide emission by up to 10.41 million tonne can be achieved by 2021-22, if the proposed Ethanol Blended Petrol (EBP) Programme target can be successfully met.

The report has been brought out by the University of Petroleum and Energy Studies, Dehradun, along with the Centre for Study of Science, Technology and Policy, Bengaluru and New Delhi-based public policy and legislative drafting firm PLR Chambers.

Besides carbon dioxide, a significant amount of reduction in pollution by other local pollutants can also be achieved if the usage of blended ethanol is promoted as per the EBP Programme, said the report, released Y B Ramakrishna, Chairman, Working Group on Biofuels, Ministry of Petroleum and Natural Gas.

The National Policy on Bio-fuels has set a target of 20 per cent blending of biofuels, both for bio-diesel and bio-ethanol. However, India is projected to achieve an average blending rate of close to 5 per cent by the end of 2016.

The report said India's current domestic ethanol capacity stands at approximately 2,240 million litres annually. According to the projection made by the study, there would be a deficit in supply of ethanol to the tune of 822 million litres (27 per cent) when demand from domestic chemical and potable alcohol industry is also factored in.

In 2016-17, demand from the chemical and potable alcohol industries is projected to be around 1,252 million litres and 1,030 million litres, respectively.

For the way forward for the EBP Programme, the report has recommended extension of financial support to key players in the value chain, rationalisation of pricing and taxation mechanism, and simplification of the regulatory framework.