Why in the News?

Union Minister Nitin Gadkari announced that India will reach its goal of blending 20% ethanol with petrol in the next two months, a year earlier than planned. This will require producing about 1,100 crore litres of ethanol in a year.

Does India’s ethanol distillery industry have the capacity to produce large ethanol? 

• Current Production Capacity: India’s ethanol distillery capacity has significantly increased to 1,600 crore litres as of 2024-25, up from 423 crore litres in 2019-20. This expansion has been driven by government incentives and a stable market for ethanol.
• Projected Production: To meet the target of 20% blending of ethanol in petrol, approximately 1,100 crore litres of fuel ethanol will be produced annually, with sugarcane expected to contribute around 400 crore litres this ethanol year.
• Diverse Feedstocks: Ethanol production is now utilizing not just sugarcane but also high-grade molasses, broken rice, and maize, indicating a shift towards a more diversified feedstock strategy.
• Government Support: The Indian government has implemented various measures to boost ethanol production, including reducing the Goods & Services Tax on ethanol and encouraging the establishment of grain-based distilleries.

Why have maize imports increased substantially in the past year?

• Rising Demand for Ethanol: The increase in maize imports can be attributed to the government’s restrictions on using sugar and high-quality molasses for ethanol production, leading to a greater reliance on maize as an alternative feedstock for ethanol.
• Import Figures: From April to June 2024, approximately ₹100 crore worth of maize was imported. For the fiscal year 2023-24, maize imports reached about $33 million, with total imports from April to November 2024 valued at $188 million.
• Impact on Domestic Production: As farmers shift towards maize cultivation due to its lucrative potential for ethanol production, maize output is projected to reach around 42 million tonnes for the 2024-25 ethanol year, with an estimated 9 million tonnes available for ethanol production.
• Market Adjustments: The growth in maize cultivation is expected to continue without necessitating further imports due to favourable conditions for Kharif crops this year. Farmers are increasingly diverting maize from traditional uses to meet the demands of the ethanol market.

What are the significance of the ethanol distillery industry?

• Energy Security and Reduced Import Dependence: The ethanol distillery industry plays a crucial role in enhancing India’s energy security by reducing reliance on imported fossil fuels. By blending ethanol with petrol, India aims to substitute a significant portion of its crude oil imports, which account for over 87% of its needs.
• Environmental Benefits: Ethanol production and blending contribute to significant reductions in carbon emissions and urban air pollution. Ethanol’s chemical properties allow for more complete combustion, which lowers harmful emissions such as carbon monoxide and particulate matter.
• Economic Growth and Rural Development: The ethanol industry stimulates economic growth by providing additional income streams for farmers through the cultivation of sugarcane, maize, and other biofuel crops. This has led to increased investments in distilleries and agro-processing industries, creating jobs and revitalizing rural economies.
  • The government’s initiatives, such as the PM-JI-VAN Yojana, further incentivize ethanol production, ensuring stable farmer incomes and promoting diversification in agricultural practices.

Way forward: 

• Enhancing Domestic Maize Production: Strengthen R&D in high-yield maize varieties, improve irrigation infrastructure, and provide financial incentives to farmers to ensure a stable domestic supply for ethanol production, reducing import dependency.
• Sustainable Feedstock Diversification: Promote second-generation (2G) biofuels using agricultural waste and non-food biomass to minimize food security concerns while maintaining ethanol production growth.

PYQ:

Q With reference to the usefulness of the by-products of sugar industry, which of the following statements is/are correct? (UPSC IAS/2022)

1. Bagasse can be used as biomass fuel for the generation of energy.
2. Molasses can be used as one of the feed stocks for the production of synthetic chemical fertilizers.
3. Molasses can be used for the production of ethanol.

Select the correct answer using the codes given below.

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

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