From the Editor’s desk: Reliance on domestic ethanol production crucial to tide over West Asia crisis

In the ongoing 2023-24 Ethanol Supply Year (ESY), the country has achieved 11.96% ethanol blending till March end. This is behind the Government’s blending target of 15% for the current year.

To begin with, the forecast of overall sugar production shortfall in 2023-24 SS, required Government’s intervention. The supply of molasses-based feedstocks- B Heavy molasses and sugarcane juice, was reduced for ethanol production. The Government further capped total sugar diversion for ethanol production to 17 lakh tons as against 38 lakh tons of sugar diverted for ethanol production in the previous season. This development in the new season put the breaks on the ethanol blending programme.

In the grain-based ethanol space, the Government had already banned the supply of FCI rice for ethanol production from last year, hence the producers had to rely on Damaged Food Grains (DFG) and maize as principal feedstocks for ethanol production in the current year. These factors have resulted in tepid ethanol production in the current year, but another important factor i.e. lack of efficient and proper infrastructure in OMC depots is further impeding the blending further as grain-based distillery units are unable to supply ethanol produced by them to OMCs.

The Associations representing the grain-based distilleries- AIDA and GEMA, have written to the Government and OMCs asking for solution and intervention in ironing out the infrastructure crisis, but the situation remains status quo.

To ensure smooth implementation of ethanol blending programme in the country and to achieve 15% ethanol blending in the current year and 20% in 2025-26, the OMCs have to improve their depot infrastructure, and increase investments in it. In the current season, the OMCs should increase the decantation process and clear the logjam, so that ethanol reaches the depots from grain-based distillery units.

Another six months are remaining in the ESY, which means ethanol blending has to pick up significantly to achieve the 15% blending target. Media reports suggest that the Government is expected to allow the production of ethanol from the ‘actual authentic’ B Heavy Molasses stocks available in the country. The quantity lying with mills is equivalent to 8 lakh tonnes of sugar. The official notification should come immediately so that ethanol production in the season is boosted.

With the war clouds looming over West Asia, crude oil prices are already inching upwards. The country should focus on ethanol fuel and examine every possible measure to increase its production in the country, so that the exchequer doesn’t bleed in importing costly crude during this volatile situation.