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Ethanol blended petrol

  Jul 13, 2020

Ethanol blended petrol

What does the direction state?

The Ministry of Petroleum and Natural Gas issued directions to oil marketing companies in February 2019, to sell 10% ethanol blended petrol in all states and union territories (except Andaman and Nicobar Islands and Lakshadweep) from April 1, 2019.

The central government may modify the areas and the percentage of ethanol blending, and specify the period for the same. 

Under which programme these guidelines have been issued?

These guidelines have been issued under The Ethanol Blended Petrol Programme, 2003.

What is Ethanol Blended Petrol Programme, 2003?

It was launched in 2003 to promote the use of alternative and environment friendly fuels. Blending ethanol with petrol helps reduce vehicle exhaust emissions and reduces the import burden for petroleum. It is implemented by the Ministry or Oil Marketing Companies (OMCs).

What was the previous blending target?

Earlier, oil marketing companies were mandated to sell 5% ethanol blended petrol, subject to commercial viability. The directions increased the blending percentage from 5% to 10%. Further, the mandate of selling ethanol blended petrol was extended to the north-eastern states and Jammu and Kashmir.

What will be the benefits from this decision?

  1. Reduction in import dependency.
  2. Support to agricultural sector.
  3. Environmental friendly fuel.
  4. Additional income to farmers.
  5. Fulfilling the Paris climate deal commitments.

Why the need for such move?

India is the third largest consumer of energy in the world after China and the US.

India is dependent on imports for about 82.1% of its crude oil requirement and to the extent of about 44.4% in case of natural gas.

India is expected to need 10 billion litres of ethanol annually to meet the 20% blending target in 2030 if petrol consumption continues to grow at the current pace. At present, the capacity stands at 1.55 billion litres a year.

What are the concerns and challenges?

  1. Consistent shortfall in supply of ethanol in the past, mainly on account of the cyclical nature of the sugarcane harvests in the country.
  2. Lack of an integrated approach in the EBP across its value chain.

What is the way forward?

The National Policy on Biofuels has set a target of 20% blending of biofuels, both for biodiesel and bioethanol. This will require an integrated approach in the Ethanol Blending Programme (EBP). The time is ripe for a cogent and consistent policy and administrative framework in the program implementation for the success of EBP.