The government has approved preliminary approval to 422 ethanol projects, which could increase annual production capacity by 1,675 crore liters. These ventures, which are expected to cost ₹ 41,000 crore in total expenditure, will be given soft loans on more favourable terms by banks.
This will favour farmers while also accelerating the programme of ethanol blending with petrol to minimize reliance on oil imports. The government has set a goal of achieving 8.5 percent ethanol blending this year, 10 percent the next year, and 20 percent by 2025.
‘These plans come from 22 separate states. As a result, we will have dispersed ethanol production that will benefit farmers throughout the nation. Through these new ventures, we plan to almost double our current production capacity of 684 crore liters in the next 3 years,’ has said a senior food ministry official.
He claims that the recent decision by the government to expand subsidized credit facilities to grain-based distilleries has contributed to the boom in ethanol-based ventures. For five years, the government offers a 6% interest subsidy, or half the interest rate charged by banks, as well as a one-year moratorium.
‘Of the 422 proposals submitted, 201 were from grain-based distilleries and 141 were from distilleries that used both grain and molasses as feed stock. We anticipate that more ventures of this nature will emerge,’ he mentioned.
According to the official, the oil marketing companies would need 1,000 crore liters of ethanol to meet the 20% blending target. In addition, 400 crore liters of ethanol will be required for the chemical and other industry.
In addition, 400 crore liters of ethanol will be required for the chemical and other industry. The sugar industry is likely to supply 700 crore liters of the total demand of 1400 crore liters, while grain-based distilleries will supply another 700 crore liters,’ he said.
In addition, the government has requested sugar mills to divert 6 million tonnes of surplus sugar for ethanol production. It has also facilitated direct ethanol production from broken rice, rotten grains, maize, and other grains, assisting farmers in obtaining fair prices.
‘We would need 17.5 crore tonnes of grains to produce 700 crore liters of ethanol from grain-based distilleries,’ the officials stated.