The Grain Ethanol Manufacturers Association (GEMA) has written a letter to the Joint Secretary (Refinery), Ministry of Petroleum & Natural Gas, Joint Secretary (Sugar), DFPD and OMCs requesting guidance & support on the problems being faced by the grain-based distillery units regarding decantation and overstocking issues.
The letter states that there is a huge delay in the decantation of tankers at almost all depots of OMCs, due to which the supply chain is getting affected and at the same time it is putting an extra financial burden on the Association’s member units. The storage of all distillery units is full of ethanol produced by them and no further tankerage is available. The situation has escalated to such an extent that the units have no other option but to shut down their production.
The letter mentions that during the various meetings held with the OMCs, it was informed that the blending is done at 12% and almost 95% of the petrol being sold by them, whereas not more than 5% is blended as E-20. Apart from this, the decantation & tankerage infrastructure with OMCs is not sufficient to handle the entire supply of ethanol, even while blending at 12% at present.
The Association says that since the ethanol blending programme for 2023-24 was planned for blending at 15%, it is befuddling to know that the blending is done only at 12%.
“We would like to highlight that grain ethanol capacity is already built up for 400+ crore litres per annum, which is expected to grow up to 600+ crore litres by FY 2024-25. This can be verified with the fact that in the Q3 period, grain ethanol has been offered to supply almost 125 crore litres, provided the feedstock is available”, the letter says.
The Association highlights that unless the infrastructure for decantation & tankerages at all depots of OMCS is not enhanced to meet the projected demands, the problem will exist despite the availability and DEPs are bound to suffer.
“It is, therefore, requested to kindly take immediate action, in order to achieve the 15% blending target in the ESY 2023-24, by creating proper infrastructure facilities required at all oil depots of OMCs. This will not only reduce the decantation period at depots but will also solve the overstocking problems at the ethanol units, resulting in releasing of stuck up working capital due to overstocking of ethanol and in tankers waiting for decantation” the letter states.
