NEW DELHI: A government-appointed panel has recommended to the Centre to keep the price of ethanol-blended petrol lower than normal petrol in view of lower calorific value as also to incentivise people to go for the clean fuel.
The expert committee on “Ethanol Roadmap” has said, “For better acceptability of higher ethanol blends in the country, retail price of such fuels should be lower than normal petrol to compensate for the reduction in calorific value and incentivise switching to the blended fuel. Tax breaks on ethanol as a fuel may be considered by the government.”
It has also said that in order to bring predictability and encourage investment by entrepreneurs in expansion and new ethanol capacities, the government may devise and declare a floor price of ethanol for five years with an escalation clause for purchase by oil marketing companies.
According to estimates, the total supply of ethanol for this year is pegged at 323 crore litres and the expert panel has estimated that India would need 1,016 crore litres in 2025 to meet the requirement of 20% blending of ethanol in petrol by that year. This means the overall production of ethanol from all sources needs to be increased at least three-fold in the next four years.
The panel in its report has said the current ethanol production capacity in India of 426 crore litres derived from molasses-based distilleries, and 258 crore litres from grain based distilleries is proposed to be expanded to 760 core litres and 740 core litres respectively. “This would be sufficient to produce 1016 crore litres of ethanol required for ethanol blended petrol programme and 334 core litres for other uses. This will require 60 lakh tonnes of sugar and 165 lakh tonnes of grains per annum in ethanol supply year 2025 to be used for producing ethanol, which the country can support,” it said.
It has recommended that special efforts are needed to attract investors to the northeast to avail the interest subsidy scheme and build an adequate distillation capacity and to avoid long distance transport of ethanol. The panel has also said a system for single window clearances may be formulated to accord speedy clearances for new and expansion projects for ethanol production.
For seamless movement of ethanol, the committee has recommended that the product meant for blending in petrol, being denatured, should be allowed unrestricted movement and should be free from the control of the states. Currently, only 14 states have implemented these amended provisions.