The Indian Sugar & Bio-energy Manufacturers Association (ISMA) has responded to the government’s call for suggestions on the ‘Roadmap for Ethanol Blending Beyond 2025’ by presenting its recommendations at the 2nd Inter-Ministerial Committee (IMC) meeting, held on November 30, 2024. The apex body shared a detailed roadmap that emphasised the need for a collaborative approach that combined policy support, investments and technological innovation to enhance India’s energy security and successfully address future demands.
India has advanced its E20 target from 2030 to 2025 with an infrastructure expansion of over 17,000 retail outlets dispensing E20 and 400 pumps for E100 fuels. This has also led to an increase in the demand for ethanol blending, requiring significant capacity addition. Through the Global Biofuels Alliance, India continues to play a pivotal role in the promotion and adoption of biofuels across the world. As the nation strives to enhance its energy security, it requires a long-term vision that involves a clear roadmap to address future demands.
Deepak Ballani, Director General at ISMA, said, “Ethanol is not just a fuel; it is a transformational solution that has transitioned millions of Indian farmers from being ‘Annadatas’ to ‘Urajaadatas’—energy providers. With India’s ethanol capacity currently at 1,683 crore liters, scaling up to 2,362 crore liters by 2030-31 is essential. We have submitted that based on global experience there should be three pillars critical to the success to this programme- the demand side incentives through differential fuel pricing, supply side incentives through tax reductions and PLI on FFV & HEV vehicles and finally provide correct carbon accounting and benefits at all levels of the value chain. Achieving this vision requires a collaborative approach, combining policy support, private investments, and technological innovation, in line with India’s commitment to sustainable and inclusive growth”.
Responding to the government’s call, ISMA shared a roadmap for India beyond E20. One of the key areas of focus in the roadmap is flexibility in ethanol use. The strategy is to promote the use of E100 (hydrous ethanol) along with the current E20 blend to ensure a smooth transition to higher ethanol blends. This will maximize the benefits of ethanol as a sustainable fuel option.
Another important part of the roadmap is the adoption of advanced technologies to complement ethanol use. This includes the introduction and proliferation of Flex-Fuel Vehicles (FFVs), Hybrid Electric Vehicles (HEVs) and other ethanol-compatible technologies. These steps will not only help in reducing carbon emissions but will also increase energy efficiency.
Role of ethanol in driving India’s growth:
- Sugarcane occupies only 2.8% of India’s cropped area and has opened up new income streams for over 55 million farmers via ethanol production.
- Biofuels not only contribute to GDP by replacing fossil fuel imports with domestic fuel but, by allowing Indian farmers access to alternate energy markets, they can also create a distributed growth journey.
- Emission Benefits of Hydrous E100: A net-zero fuel eligible for carbon credits, hydrous E100 can help India decarbonise faster.
- Economic Benefits: Ethanol reduces India’s dependence on fossil fuels, contributes to rural growth and saves on fertiliser subsidies.
Key recommendations suggested by ISMA include:
- Interest Subvention: Enhance targeting subsidies of ₹35,000 crore to create additional 770 crore liters of ethanol production capacity.
- Tax Reforms: Reduce GST to 5% for FFVs and differential pricing on Ethanol fuel. Total Cost of Ownership (TCO) normalisation of FFV’s & BEV’s.
- R&D Support: Invest in 2G ethanol production, Sustainable Aviation Fuels (SAF) and ethanol to hydrogen conversion.
- Pricing Mechanism: Link formula-based pricing of ethanol with Fair and Remunerative Price (FRP) of sugarcane.
- Infrastructure Expansion: Permission for establishing Ethanol Pumps for sugar biorefineries through “Bio Hubs”.
Brazil has an average ethanol blending of 54% and ISMA envisions a similar trajectory for India. Brazil’s model of systemic regulation, production incentives and carbon credits is a benchmark for energy security and economic benefits. To speed up the green transition in India, ISMA proposes the creation of bio-hubs near sugar mills. These green energy hubs will integrate ethanol production with other renewable initiatives such as bioelectricity, biofertilizers and biogas production. This, in turn, will ensure the efficient use of resources, a circular economy and a sustainable future.
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