Bihar aims to grow bigger in ethanol production

Bihar aims to achieve big in the ethanol production as 9 projects have started production with around 1500 kilo litres per day capacity.

According a senior official from the state, Bihar is 6th largest producer of sugarcane in the country. Also, it ranks first in water availability. Along these, supporting policy will help the State to become a leader in the ethanol production in the country. The State also plans to show these as success stories during two days global investors’ summit, ‘Bihar Business Connect 2023’, to be held from 13 to 14 December, 2023.

In a response to question in Rajya Sabha, earlier this year, the Centre informed that a total of 47 ethanol projects in Bihar have been approved under various ethanol interest subvention scheme from July, 2018 to April, 2022 out of which 7 projects are molasses based, 32 grain based and 8 dual feed.

Under the ‘scheme for extending financial assistance to sugar mills for augmentation of ethanol production capacity’, the central government extends soft loan through banks to the mills for setting up new distilleries/ expansion of existing distilleries and installation of incineration boilers or installation of any method as approved by Central Pollution Control Board for Zero Liquid Discharge. The government is extending financial assistance in the form of interest subvention @ 6 per cent per annum or 50 per cent of the rate of interest charged by banks, whichever is lower, on the loans to be extended by banks for five years including a one-year moratorium.

During the last three years, ₹9.32 crores under the Ethanol Interest Subvention Scheme have been released by the Government for 4 projects in Bihar for enhancing distillation capacities. During first three months of sugar season 2022-23 (from 1st October to 30th September), about 85 Lakh Metric Ton (LMT) of sugarcane (from the distilleries attached to sugar mills) has been diverted for ethanol production in the country including about 2.5 LMT of sugarcane in Bihar.

As per the Seventh Schedule of Constitution of India, water comes under the purview of State Governments. However, the Task Force on sugarcane and sugar industry constituted under the Chairmanship of Member (Agriculture), Niti Aayog, as outlined in the Roadmap for Ethanol Blending in India 2020-25, has estimated that sugarcane and paddy, which are the principal sources of ethanol, are using 70 per cent of the country’s irrigation water. The share of Bihar in total production of paddy and sugarcane is 5.4 per cent and 2.7 per cent respectively in the country.

Bihar Government formulated and notified Ethanol Production Promotion Policy, 2021. It proposed to make Ethanol manufacturing in the State more attractive for potential investor and aimed at defining the broad contours of the government’s mission towards augmenting the development of Ethanol manufacturing Industries.

Traditionally, Bihar has been leader in the Sugarcane production in India and is also home to large number of Molasses based Distillery units. Ethanol manufacturing in the State using Sugarcane Juice, Maize and Broken Rice as feed-stock has significant potential for growth. The National Policy on Biofuels, 2018 and subsequent pronouncements by the Government of India offer a very conducive regulatory and institutional eco-system for sustainable growth of Ethanol and CBG manufacturing in States such as Bihar which is endowed with large number of feed-stocks such as Sugarcane, Maize, Rice and agricultural residues.