GEMA requests government to issue surplus FCI rice to grain ethanol industry

The Grain Ethanol Manufacturers Association (GEMA) has urged the government to issue surplus FCI rice to the grain ethanol industry and ensure price equalization for grain-based ethanol.

GEMA has submitted a formal appeal to Tarun Kapoor, Advisor to the Prime Minister, highlighting the critical challenges faced by the grain ethanol sector. The association has requested government intervention to address rising feedstock costs, which are jeopardizing the viability of ethanol production.

In a letter addressed to Kapoor, GEMA President Dr. C.K. Jain emphasized the transformative impact of the Ethanol Blended Petrol Program (EBPP), which has attracted investments exceeding Rs. 40,000 crore and stated this movement has significantly mobilized the rural and agricultural sectors of our economy. However, the association stressed that the exponential growth of the grain ethanol industry has led to a sharp increase in feedstock prices, making ethanol production economically unviable.

To address this issue, GEMA has proposed the following measures:

• Issuance of surplus FCI rice: Allocate surplus FCI rice to the Grain Ethanol Industry until sufficient maize crop becomes available to meet industry demands.
• Linking FCI rice pricing to ethanol procurement rates: Align the pricing of surplus FCI rice with the ethanol procurement formula specified in tenders issued by OMCs.
• Maize ethanol pricing: Establish a link between the pricing of maize-based ethanol and the MSP of maize to ensure fair valuation.
• Price equalization: Standardize the pricing of all grain-based ethanol based on a weighted average of the allocated quantities for ESY (C-1, C-2) 2024-25, as determined by the OMCs.
• The association urged swift action, noting the strategic importance of ethanol as a renewable energy source and its role in reducing India’s dependency on imported fossil fuels.