Production of Ethanol

Context: Department of Food and Public Distribution (DFPD) has informed that ethanol produced either from molasses or sugarcane is same and equally beneficial.

  • National Biofuel Policy -2018 envisages an indicative target of 20% blending of ethanol in petrol(10% by 2022) and 5% blending of biodiesel in diesel in the whole country by 2030.

The important measures taken to increase the production of ethanol for blending include:

  • Encouraging the production of ethanol from sugarcane juice and sugar/sugar syrup.
  • Fixing the remunerative ex-mill price of ethanol from various feedstocks.
  • Extending interest subvention to distilleries.
  • Amendment to Industries (Development & Regulation) Act, 1951, for free movement of denatured ethanol for Ethanol Blended Petrol (EBP) Programme.
  • Reduction in Goods & Service Tax on ethanol meant for EBP Programme from 18% to 5%.
  • Extension of EBP Programme to the whole of India except island UTs of Andaman Nicobar and Lakshadweep
  • Enhancing ethanol storage at Oil Marketing Companies locations.
  • Formulating an “Ethanol Procurement Policy on a long-term basis under Ethanol Blended Petrol (EBP) Programme”. 
  • The authorized entities in addition to conventional fuels are required to install facilities for marketing at least one new generation alternate fuels like Compressed Natural Gas (CNG), biofuels, Liquefied Natural Gas (LNG), electric vehicle charging points etc. at their proposed retail outlets (RO) within three years of operationalization of the said outlet.

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