Why in the News? 

India is on track to achieve its ambitious goal of blending 20% ethanol with petrol by 2025-26. While significant progress has been made in increasing ethanol production, the initiative is not without its challenges. The food versus fuel debate and concerns about fuel efficiency in existing vehicles continue to loom large over the ethanol economy.

State of Ethanol Production in India

• Dramatic Increase in Ethanol Blending: Ethanol blending percentage rose from 8% in 2021 to 13-15% in recent years. Significant progress indicates a strong push towards meeting the 20% blending target.
• Substantial Investment in Production Capacity: The sugar industry has invested approximately ₹40,000 crore to boost ethanol production. This investment is key to increasing the country’s ethanol production capacity.
• Nearing Production Targets: India is close to achieving its target of producing 1,380 crore litres of ethanol. Production contributions come from both sugarcane-based and grain-based distilleries.
• Government Roadmap and NITI Aayog Projections: NITI Aayog’s roadmap called for a significant increase in ethanol production, with a focus on grain-based distilleries. By December 2023, nearly all ethanol capacity targets had been achieved. The expansion has primarily relied on sugarcane-based production.

The Food vs. Fuel Debate & other Concerns

• Food Security Concerns: The push for ethanol blending has raised alarms about its potential impact on food security. Increased use of food grains, particularly maize, for ethanol production is at the center of the concern.
• Rising Maize Imports: Recent data shows an increase in maize imports from April to June this year.The rise is driven by higher demand for fuel ethanol and restrictions on using sugarcane products.
• Price hike Concerns: Despite industry assurances of sufficient food stocks, the diversion of grains for ethanol production could lead to price hikes. Sectors like poultry, livestock feed, and starch production could be negatively affected.India’s maize yield is still below global averages, intensifying concerns about the strain on food supplies.
• Water Usage Concerns: Expanding sugarcane production to meet ethanol targets has significant environmental implications, especially concerning water usage. Sustaining ethanol production from sugarcane may require an additional 400 billion litres of water.
• Impact on Agricultural Sustainability: The increased water demand for sugarcane could divert irrigation resources from essential food crops. This diversion raises concerns about the long-term sustainability of agriculture in the region.
• Competition for limited resources: Government policy supports using maize, surplus rice, and damaged grains for ethanol production. This approach could intensify competition for these resources, potentially impacting food availability.
• Impact on Vehicle Efficiency: Ethanol has a lower energy content, which can reduce fuel efficiency in vehicles not designed for higher ethanol blends. A NITI Aayog report indicates that ethanol blending could decrease fuel efficiency by an average of 6% in such vehicles.

The ongoing debate underscores the need to shift towards more sustainable 2G and 3G ethanol technologies. These advanced technologies have less impact on food security compared to 1G ethanol, which relies on food grains and sugarcane.

Regional Variations in Ethanol Production and Policy

Ethanol production and its economic impact vary widely across different Indian states, influenced by local economic priorities, agricultural practices, and policy frameworks.

• Uttar Pradesh: As the largest contributor to India’s ethanol blending program, Uttar Pradesh is fully aligned with the central government’s ethanol mission. The state has reserved 25% of its ethanol production for Extra Neutral Alcohol (ENA), used in liquor production. However, the higher value of ethanol made from molasses, especially B-heavy molasses, has made fuel ethanol more attractive to distilleries.
• Tamil Nadu: In Tamil Nadu, the lucrative liquor market dominates the ethanol economy, and fuel ethanol production has not gained as much traction. The state government controls the liquor market, and the high water requirements for sugarcane cultivation limit the expansion of ethanol production from this crop. There is also resistance to using rice for ethanol production due to its association with liquor.
• Maharashtra: Maharashtra presents a different scenario, where ENA production for industrial uses, such as manufacturing and medicine, is more profitable than ethanol blending. However, there is potential for ethanol production to become more attractive if steady contracts for blending can be secured, reducing the need for additional processing after ensuring purity.

Conclusion

India’s ethanol blending program has made significant progress, but the challenges of balancing food security, agricultural sustainability, and vehicle efficiency must be carefully managed to ensure the initiative’s long-term success. The varying approaches and impacts across different states underscore the need for a balanced and inclusive strategy to achieve the national ethanol blending targets.