Government Introduces Modified Scheme on Ethanol Production

***It further added that introducing new grain-based distilleries across the country would distribute the production of ethanol and would save a huge amount of transportation cost and also prevent delays in the blending part. It would also benefit the farmers across the country. ***

On Thursday, the govt. notified a "modified" scheme that will provide financial aid to distilleries that manufacture first-generation ethanol from feedstocks, that include cereals as well. This assistance will be provided for the expansion of capacity, setting up of new distilleries and for converting the molasses-based distilleries to dual feedstock. The government said in a statement that distilleries, sugar mills or entrepreneurs have to submit an application to the Union Food Ministry within a period of 30 days from the notification for benefiting from the assistance under the scheme.

The three primary producers of sugarcane and ethanol are Uttar Pradesh, Maharashtra and Karnataka. The statement said that the transportation of ethanol to other states from these three states comes with a huge cost. It further added that introducing new grain-based distilleries across the country would distribute the production of ethanol and would save a huge amount of transportation cost and also prevent delays in the blending part. It would also benefit the farmers across the country.

The statement has also asked the state governments to help in the promotion of this scheme and in the encouragement of entrepreneurs to participate in this so that the targets are met on time for the production of ethanol. The state governments have been asked to help in the facilitation of entrepreneurs in arranging land for the project, getting immediate environmental clearance and also for setting up distilleries. For the industry associations, their part would be to promote and encourage their members to participate in the scheme, the statement said.

Under this scheme, the govt. will bear interest subvention for five years, including one-year moratorium against the loan taken by project proponents from banks at a rate of 6 per cent per annum or 50 per cent of the rate of interest charged by banks, whichever is less. This will be done for setting up of new distilleries and expansion of existing distilleries and also for converting molasses-based distilleries to dual feedstock. For the manufacturing of ethanol, there is enough availability of feedstocks and the government has also fixed remunerative prices of ethanol derived from various feedstocks. Also, the government said that it has proposed to prepone the blending of 20 per cent ethanol with petrol by the year 2025. India will have a need of about 1,000 crore litre of ethanol for doping in petrol by the year 2030 with a view to minimising the dependency on imports for meeting the country's oil needs. The statement added that India currently has a capacity of 684 crore litres.