Ethanol blending in petrol will cross 8% in 2020-21

Ethanol blending in petrol will cross 8% in 2020-21 after reaching 5% in the previous year despite the pandemic, Petroleum Secretary Tarun Kapoor told ET. State oil marketing companies received 173 crore litres of ethanol for blending with petrol during ethanol supply year that ran between December 2019 and November 2020. The volume was lower than 189 crore litres of 2018-19 but the share in petrol blending was the same at 5% due to the overall decline in fuel sales due to the pandemic, which also curbed the availability of ethanol.

“This year we are quite certain of crossing 8% ethanol blending in petrol,” said Kapoor. Behind this confidence is the supply offer of 320 crore litres for this year from various suppliers in recently floated tenders. The rise in ethanol supply offers has come on the back of the government widening the basket of raw materials that could be used to produce the green fuel. This year the offers of ethanol derived from food grains have risen to 40 crore litres from 10-12 crore litres in previous years, Kapoor said.

“A rise in food grains-based supply will help farmers and stabilize the food market,” he said. Earlier, only molasses-based ethanol was allowed. Then the government broadened the choices to include damaged food grains, and normal gains in a surplus year as well as maize. Distilleries can also convert excess sugar to ethanol. The government has set a target of 10% ethanol blending in petrol by 2022 for state-run oil companies. Blending is being promoted to help cut expensive oil import and reduce air pollution.

The government is also promoting compressed biogas as it is aggressively encouraging the distribution of natural gas across the country. The government has set a target for setting up 5,000 compresses biogas plants by 2023-24 with a production target of 15 million tonnes. “This will become a gamechanger for rural India. This has several advantages of Atmanirbhar Bharat (self-reliance), swachhta (cleanliness), and energy security,” Kapoor said.

State-run oil companies have already issued 700 letters of intent (LOIs) for such plants to entrepreneurs. They have also signed initial agreements to set up another 900 biogas plants. It takes about two years to set up a plant. “We are hopeful that a large number of plants will come up in the next two years,” Kapoor said.

— Tarun Kapoor Secretary, Ministry of Petroleum & Natural Gas Government of India