Ethanol Blending Rollout Program In India

<p style="text-align: justify;">Achieving energy security and transitioning to a thriving low-carbon economy is critical for a growing nation like India. India has been a net importer of petroleum. It imported 185 Mt at US $ 551 billion in 2020-21, most of which is used in transportation.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Ethanol Blended Petrol (EBP) Program&nbsp;</span></h2><p style="text-align: justify;">Ethanol is a less polluting fuel and offers equivalent efficiency at a lower cost than petrol. Blending locally produced ethanol with petrol will help India strengthen its energy security, enable local enterprises and farmers to participate in the energy economy, and reduce vehicular emissions. The Government of India notified the National Policy on Biofuels &ndash;2018 (NPB&ndash;2018) on 4.6.2018 wherein, under the Ethanol Blended Petrol (EBP) Program, an indicative target of 20% blending of ethanol in petrol by 2030 was laid out. &nbsp;</p><p style="text-align: justify;">The Central Government has targeted the E20 blending program for vehicles by 2025, i.e., advancement by five years from an earlier target of 2030. It is estimated that a well-laid-out and effective implementation of the E20 program can save the country US $4 billion annually (approx. Rs. 30,000 cr. Annually).</p><p style="text-align: justify;">Rising production of foodgrains and sugarcane, technological advancement in ethanol production from plant-based sources, SIAM working on the feasibility of making vehicles compliant to E20 ethanol blended petrol to make it a national imperative and an important strategic requirement. &nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><strong>Steps Taken&nbsp;</strong></p><p style="text-align: justify;">A favorable regulatory and retail ecosystem for the safe and effective use of ethanol-blended petrol has been put in place by various government agencies. OMCs have prepared their plans for the phased rollout of E20 blended petrol. &nbsp;</p><p style="text-align: justify;">Vehicle manufacturers have assured of making a similar plan for tweaking the engine and other parts to make the vehicle safe without compromising on the engine's efficiency. &nbsp;</p><p style="text-align: justify;">The government has constituted a committee which, in its report, has suggested an annual roadmap for the production and supply of ethanol till 2025-26, and systems for its countrywide marketing. The suggested roadmap is eminently achievable, provided there is effective oversight of the progress. &nbsp;</p><p style="text-align: justify;">Considering the multiple agencies involved, an efficient and timely rollout calls for effective coordination between actors and close monitoring. The committee has observed that a very strong foundation for the ethanol blending program has been laid out through the following initiatives:&nbsp;</p><ul style="text-align: justify;"><li>Interest subvention scheme for molasses and grain-based distilleries (DFPD)</li><li>The setting of standards for E5 (Ethanol 5%, Petrol 95%), E10, and E20 blends of Ethanol blended petrol (Bureau of India Standards, BIS)</li><li>MoRT&amp;H, GoI notified GSR 156(E) on 8th March 2021 to adopt E20 fuel as automotive fuel and issued mass emission standards for it. MoRT&amp;H has also notified safety standards for ethanol-blended fuels vide GSR 343(E) dated 25th May 2021 based on the Automotive Industry Standard (AIS 171). It lays down safety requirements for type approval of pure ethanol, flex-fuel, and ethanol-gasoline blended vehicles in India</li><li>BS-VI Emission norms since 1st April 2020 are applicable for E-20 Vehicles</li></ul><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">A consumer awareness campaign by the government through its agencies detailing the benefits of ethanol blending for the nation will help generate active participation from vehicle owners and smoothen the rollout. The rollout plan suggests pan-India availability of E10 from April 2022 as a protection fuel to meet the demands of existing vehicles till April 2025.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="" target="_blank" rel="noopener">Umesh Dhoot</a></em></span><br />&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Umesh Dhoot</span></h3><h3 style="text-align: justify;">&nbsp;</h3><h2 style="text-align: justify;"><span style="font-size: 12pt;">1. How will the consumer awareness campaign by the government help in the smooth rollout of the ethanol blending program? </span></h2><p style="text-align: justify;">With liberalized feedstock policy, incentives, and close monitoring, sufficient capacity for ethanol production will likely be built in the country to meet demand till 2025. For this, the sugarcane-based and grain-based ethanol production capacities shall be augmented by 78% and 187% from the existing capacities, respectively. To enable a Pan-Indian rollout, ethanol must be supplied from surplus to deficit states per requirements to ensure uniform availability of ethanol blends in the country. &nbsp;</p><p style="text-align: justify;">MoP&amp;NG has already notified for Pan-India availability of E10 fuel by April 2022 and its continued availability after that until 2025 for older vehicles and launch of E20 in the country in phases from April 2023 onwards to make E20 available by April 2025. &nbsp;</p><p style="text-align: justify;">Higher ethanol blends may be rolled out in phases, starting with the states having surplus ethanol production. MoPNG should notify that the blending program is applicable to all oil marketing companies, including private companies. This will trigger action by all relevant stakeholders.&nbsp;</p><p style="text-align: justify;">A nationwide educational campaign should be launched jointly by MoP&amp;NG through its OMCs, MoRT&amp;H and DHI in partnership with the industry to educate the consumers on the benefits of EBP and to select the correct fuel for their class of vehicles.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. How can India leverage technological advancements to enhance the efficiency and sustainability of the EBP program and achieve energy security?&nbsp;</span></h2><p style="text-align: justify;">Over time, technology for producing ethanol from non-food feedstock called &ldquo;Advanced Biofuels,&rdquo; including second generation (2G), should be promoted to tap this abundantly available resource without causing any trade-off with the food production system. &nbsp;</p><p style="text-align: justify;">A close follow-up is required of the planned steps for enhancing ethanol production capacity across the country to 1500 Cr. litres by ESY 2025-26 required for E20 blending. &nbsp;</p><p style="text-align: justify;">Special efforts are needed to attract investors to the Northeast of the county to avail the Interest Subvention Scheme of DFPD (Department of Food &amp; Public Distribution), build an adequate distillation capacity, and avoid long-distance ethanol transport.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. What are the challenges in implementing the EBP program and achieving energy security in India?&nbsp;</span></h2><p style="text-align: justify;">There are many challenges in the implementation of the EPB program:</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><strong>Challenges To Producers</strong> &nbsp;</p><p style="text-align: justify;">Availability of sufficient feedstock on a sustainable basis, viz., sugarcane, food grains, etc. The list of feedstocks allowed for ethanol production needs to be expanded&nbsp;</p><p style="text-align: justify;">Augmentation of ethanol production facilities.&nbsp;</p><p style="text-align: justify;">Inter-state movement of ethanol &nbsp;</p><p style="text-align: justify;">Weather-related issues &ndash; floods/drought, thereby affecting the crop&nbsp;</p><p style="text-align: justify;">Prices of feedstock and ethanol</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><strong>Challenges To OMCs </strong>&nbsp;</p><ul style="text-align: justify;"><li>Availability of ethanol across the country</li><li>Ethanol is not produced or available in some states for blending with gasoline. About 50% of total pump nozzles in India supply only E0; Restrictions on inter-state movement of ethanol due to non-implementation of the amended Industries (Development &amp; Regulation) Act, 1951 by all the States</li><li>Ethanol blending has not been taken up in North-East states due to the non-availability of feedstock or industries. Ethanol transport to different places for blending will increase the cost of logistics and transport-related emissions</li></ul><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><strong>Changes in Marketing Infrastructure</strong> &nbsp;</p><ul style="text-align: justify;"><li>Need for additional storage tanks for ethanol at marketing terminals/depots</li><li>Need for ethanol-compliant dispensing units</li><li>Changes in nozzle calibration and legal metrology</li><li>Need for an additional underground tank, pipes/hoses, and dispensing units for ethanol blended gasoline supply at retail outlets</li><li>Dispensing infrastructure for E100 will be required for E100 two-wheelers introduced in the country. This would create space constraints at various retail outlets for setting up such extra infrastructural facilities</li><li>Policy guidelines for differential pricing and labeling of various ethanol-blended motor spirits&nbsp;</li></ul><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><strong>Challenges To Vehicle Manufacturers&nbsp;</strong></p><ul style="text-align: justify;"><li>Handhold vendors to develop ethanol-compatible parts</li><li>Optimization of engine for higher ethanol blends&nbsp;</li><li>Conduct durability studies on engines and field trials before introducing E20-compliant vehicles. Roadmap for Ethanol Blending in India: 2020-2025&nbsp;</li></ul><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">4. What steps are being taken to increase the availability of ethanol-blended petrol in India?&nbsp;</span></h2><ul style="text-align: justify;"><li>Augmenting marketing infrastructure by all OMCs</li><li>Augmenting manufacturing capacity either by putting in new plants or by enhancing the capacity of existing plants</li><li>Ensuring sufficient availability of feedstock, including the inclusion of additional feedstock</li><li>Ensuring interstate movement of ethanol by amending existing regulations suitably for transporting such products from surplus production areas to deficit areas/nonproducing areas for want of feedstock nearby</li></ul><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>
KR Expert - U K Dhoot

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