IAS Gyan

Daily News Analysis

Ethanol Blending Program

10th August, 2021 Economy

Context:

  • Currently Public Sector Oil Marketing Companies (OMCs) are selling 10% ethanol blended petrol which contains 90% petrol and 10% ethanol from their retail outlets.
  • Under this Ethanol Blended Petrol (EBP) Programme, ethanol suppliers have contracted to supply 343.16 crore Litres of ethanol to Public Sector OMCs for the ongoing Ethanol Supply Year (ESY) 2020-21.

Steps to enhance ethanol production:

  • permitting procurement of ethanol produced from other non-food feedstock besides molasses, like cellulosic and lignocelluloses materials like cotton stalk, wheat straw, rice straw, bagasse, bamboo etc. including petrochemical route
  • allowing use of sugarcane and food grains (maize and surplus stocks of rice with Food Corporation of India)  for conversion to ethanol;
  • administered price mechanism for procurement of ethanol under the Ethanol Blended Petrol (EBP) Programme including enhanced ex-mill price of ethanol year on year from ethanol supply year 2017-18;
  • lowered GST rate to 5% on ethanol for EBP Programme;
  • amendment in Industries (Development & Regulation) Act for free movement of ethanol across states for blending;
  • Interest subvention scheme for enhancement and augmentation of ethanol production capacity in the country.