Govt to expand market for ethanol to help industry wriggle out of surplus capacity

Prime Minister’s office advisor Tarun Kapoor defended the government’s ethanol blending programme against criticism in a virtual conference organized by the India Sugar & Bio-Energy Manufacturers Association (ISMA) in New Delhi. Kapoor stated that the biofuel initiative has been successful and the government is eager to broaden its market, including through flex-fuel vehicles, in order to tackle surplus industry capacities.

India currently has a capacity of approximately 2,000 crore litres of ethanol, while the oil marketing companies require around 1,100 crore litres annually to maintain the 20% ethanol blending target in petrol, which was accomplished five years ahead of schedule.

Kapoor highlighted that experiments have shown E20 ethanol to be effective, with minor fuel efficiency loss offset by higher octane levels. He emphasized that any reported issues were likely due to other factors, not the ethanol blending. The next focus for the government is on promoting flex-fuel vehicles, which will soon be introduced by several motor vehicle companies, and potentially expanding ethanol blending beyond 20% in these vehicles.

Kapoor also suggested the need to introduce additives to pure ethanol, making it more viable. He pointed out the potential for expanding ethanol use in diesel, citing experiments with isobutanol that could further increase the demand for ethanol in the refinery sector. Kapoor proposed exploring ethanol's potential applications in cooking and various industries, as well as the development of compressed biogas from sugarcane residues or surplus foodgrains grown in the country.

He emphasized the growing importance of promoting biofuels due to the ongoing West Asia crisis, which complicates crude oil supply and has pushed crude and non-crude prices near $100 per barrel.