Thursday, 18 August 2011

Ethanol Blending Programme (EBP)

Ethanol is an organic solvent, similar in properties to the components of petroleum-derived gasoline. When ethanol is blended into fuel (at recommended level) then it increases combustion efficiency of the fuel. Furthermore Ethanol blending has important consequences for energy security, livelihood enhancement of farmers, health benefits, lower oil costs to consumers and government.

In India, ethanol made its foray into the transport sector as a fuel additive in 2001. Presently, under the EBP, GOI has mandated blending of 5 per cent ethanol with petrol on an all-India basis except North-Eastern states, Jammu & Kashmir and the islands. The programme is a significant step in utilising alternative, renewable and environment-friendly sources of energy like ethanol to supplement fossil fuels.

The EBP programme is primarily based on indigenously produced ethanol from sugarcane molasses.  India is the fourth largest producer of ethanol in the world. By blending petrol with 10 per cent biofuel, 80 million litres of petrol could be saved annually in India, says a report by the Institute of Defence Studies and Analyses.2 With reduced dependence on crude oil consumers can pay less for petrol. This will also contribute to reducing the government’s subsidy burden wrt to crude oil.

Ethanol is produced from molasses that are a byproduct of the processing of sugarcane. Thus ethanol production would in no way reduce food security. Further it would lead to better returns for sugar cane farmers and consequently better sugarcane and sugar production.- Increase in rural prosperity.

Further, ethanol is environment-friendly as it enhances combustion of petrol, resulting in lower emission of pollutants. Toxic pollutants like carbon monoxide and aromatics are reduced, and the potential to produce ground level ozone is lowered because the elements necessary for its production have been greatly lessened. Studies from polluted cities of US, Europe and Brazil which have used ethanol blended fuel, show a remarkable improvement in air quality. Thus EBP will also contribute to a healthy environment and public health.

Despite all its benefits the EBP has not taken off. This is due to various reasons:
-       Conflicting views on adequate availability of ethanol.
o   An ethanol shortfall due to EBP could impact the alcohol and chemical sectors.
o   Shortage of molasses for alcohol industry could lead to diversion of foodgrains for making alcohol- affecting food security. [This would become a very serious problem for GOI if the National Food Security Act is enacted]
-       Conflicts between different ministries- the petroleum and food ministries are actively supporting EBP.
-       Higher price of molasses being offered by alcohol industry leading to diversion of molasses to alcohol industry. Oil companies have only secured 32% of required ethanol in 2011.
-       Some state governments are disinterested in the programme. Eg: Tamil Nadu has a thriving alcohol industry that contributes substantial revenues to the state, and thus TN has banned ethanol supply to EBP.

However these problems should be resolved by:
-       encourage sugar industry to manage demands of the fuel and alcohol industries
-       ensure competitive pricing for ethanol
-       conversion of surplus sugarcane into ethanol
-       explore other sources of ethanol like jatropha, seaweed, cellulose waste from agro-forestry
-                     --        Plantation of bio-diesel producing plants on waste /degraded / marginal lands.

4.     “Food Ministry seeks delay in ethanol blending plan”, The Economic Times.
5.     “The ethanol imperative”, The Hindu

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