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INDIAS POTENTIAL IN ETHANOL
INDIAS POTENTIAL IN ETHANOL
India, through the Global Biofuels Alliance (GBA), aims to boost global biofuel deployment,
focusing on market development, technology deployment, and sustainability assessments. Biofuel
demand is projected to increase by nearly 30% in the next five years, with total demand reaching 200
billion liters by 2028, driven by renewable diesel and biojet growth.(GBA), which it launched in 2023
with leaders from eight other countries / Last year, the IEA released a report to support the GBA's
development, recommending a focus on developing new and existing markets, accelerating technology
deployment, and seeking consensus on sustainability assessments.
On the 9th of September 2023, India launched the Global Biofuels Alliance with the leaders of
Singapore, Bangladesh, Italy, the United States, Brazil, Argentina, Mauritius and the UAE on the sidelines
of the G20 summit. As of January 2024, the GBA now has 22 member countries alongside 12
international organisations. The GBA aims to accelerate the deployment of sustainable biofuels.
India is now the world’s third largest producer and consumer of ethanol thanks to nearly tripling
production over the past five years. It has potential to expand further with the right policies, keeping
costs in check and securing sustainable feedstocks. In 2018 India released its National Policy on Biofuels
which set blending targets for ethanol (20% blending by 2030) and biodiesel (5% by 2030), feedstock
requirements for different fuels and laid out the responsibilities of 11 ministries to coordinate
government actions. Beyond blending targets, India established guaranteed pricing, long-term ethanol
contracts, and technical standards and codes. Financial support for building new facilities and upgrading
existing ones was also provided. Buoyed by its success, the Government moved the 20% volume
blending target for ethanol forward by 5 years to 2025-26, which was enshrined in an updated National
Policy on Biofuels in 2022
2020 3 0.2
India has other opportunities to expand biodiesel for use in diesel vehicles and biojet fuel as a
replacement for jet fuel. The government has already established a 5% biodiesel target by 2030 which
would require almost 4.5 billion litres of biodiesel per year according to IEA estimates. Mobilising
production will require a similar mix of policies as provided for ethanol including production support,
guaranteed pricing and feedstock support, especially for mobilising residue oils like used cooking oil and
vegetable oils grown on marginal land.
Biojet fuel is another growth area. On 25 November 2023, the Ministry of Oil, Petroleum and
Natural Gas announced indicative blending targets of 1% by 2027 and 2% by 2028 for international
flights leaving India. We estimate this would require near 100 million litres of biojet fuel per year, likely
to come from residue or vegetable oils grown on marginal land.
Identify and help develop markets with high potential for biofuels production: Over 80% of
sustainable biofuels production and use is in the United States, Brazil, Europe and Indonesia. Accelerate
technology deployment to commercialise advanced biofuels: Advanced biofuels must grow 11 times by
2030 from 2022 levels in the IEA’s Net Zero Scenario, doubling total biofuels production over the same
period. However, planned investments to date remain well below this level of growth.
11 October 2019
Recently, biomass is gaining a position as a renewable energy source. Considering its availability, India is
a biomass-rich country and the second-largest sugarcane producer in the world. However, shifting
towards biofuel and its strategic implementation requires thorough analysis
Brazil is one of the countries with abundant biomass resources, thanks to its vast forests and agricultural
activities. Other countries known for their biomass-rich nature include the United States, China, India,
Indonesia, and some African nations like Nigeria and the Democratic Republic of the Congo.
The components of a biofuel supply chain create a circular rural economy that results in
substantial environmental, socio-economic and health benefits for communities. A total of ₹1 lakh crore
worth of biofuel will be purchased by OMCs every year in the near future for blending. This money will
be ploughed back to the rural economy, thus doubling farmers’ incomes.
Ethanol also has a higher octane number than gasoline, which provides increased power and
performance. For example, IndyCar drivers often fuel their race cars with E98 because of its high octane.
cleaner fuel
3. **Benefits of Blending**:
- **Reduced Emissions**: Ethanol burns more cleanly than petrol, reducing emissions of harmful
pollutants such as carbon monoxide and particulate matter.
- **Renewable Resource**: Ethanol is produced from renewable plant sources, unlike petrol, which is
derived from finite fossil fuels.
- **Lower Greenhouse Gas Emissions**: Ethanol has a lower carbon footprint compared to petrol, as
the plants used to produce it absorb carbon dioxide during growth.
4. **Vehicle Compatibility**: Most modern vehicles are compatible with ethanol blends up to E10
without any modifications. Flex-fuel vehicles (FFVs) can run on blends up to E85.
5. **Environmental Impact**: While ethanol has environmental benefits, its production can also have
negative impacts, such as increased demand for agricultural land and water. It's important to consider
the overall environmental impact of ethanol production and use.
6. **Regulations and Standards**: Governments and regulatory bodies often set standards and
regulations for ethanol blends to ensure their safety, performance, and environmental impact.
Overall, blending ethanol with petrol can help reduce pollution and greenhouse gas emissions, making it
a cleaner fuel option. However, it's essential to consider the entire lifecycle of ethanol production and
use to fully understand its environmental impact.
Enterprise opportunity
Ethanol production creates jobs in rural areas where employment opportunities are needed. According
to the Renewable Fuels Association, ethanol production in 2022 accounted for nearly 79,000 direct jobs
across the country, $57 billion of the gross domestic product, and $34.8 billion in household income.
Ethanol production creates jobs in rural areas where employment opportunities are needed.
According to the Renewable Fuels Association, ethanol production in 2022 accounted for nearly 79,000
direct jobs across the country, $57 billion of the gross domestic product, and $34.8 billion in household
income.
In this context, biofuels have become a tool for achieving these delicate balance of outcomes. In
the past few years, progress made in the use of ethanol, compressed biogas and biodiesel — all different
forms of biofuel — will have a direct positive impact on both farm incomes (and the prosperity of
agricultural communities), even as it cuts down our import dependence for energy.
Ethanol supplies have improved from 380 million litres in 2013-14 to 1.89 billion litres in 2019.
Offers of about 3.5 billion litres from both sugar/molasses and grain-based distilleries are expected this
year. In addition to sugarcane, ethanol is also produced from damaged food grains, B-heavy molasses
and sugarcane juice. This translates into a sum of nearly ₹35,000 crore in the past six years — money
that has flown back to farmers through sugar mills and distilleries as oil marketing companies (OMCs)
provide off-take guarantee at fixed prices. This arrangement also improves the health of the payment
cycle to farmers since OMCs settle their ethanol dues to distilleries in 21 days instead of the months that
the farmers had to wait for their payment from sugar mills.