Ethanol blending targets scaled up from 5% to 10%: Paswan

The central government has scaled up blending targets under the 'Ethanol Blending Programme' (EBP) from 5 per cent to 10 per cent to promote blending of ethanol with petrol and its use as an alternative fuel, minister of consumer affairs, food and public distribution Ram Vilas Paswan informed the Lok Sabha in a written reply today.

The minister said that at present, 156 units are producing molasses based ethanol, with annual installed capacity of approximately 2.24 billion litres, while 12 more ethanol production facilities are being set up in different states.

He said 21 distilleries with sugar factories produce only alcohol, requiring upgradation for ethanol production capacities.

Sugar mills are provided soft loans of up to 40 per cent of the project cost from the Sugar Development Fund (SDF) for setting up ethanol projects, he said.

However, ethanol produced from molasses is not cheaper than motor spirit at refinery gate. In order to achieve the objectives of the National Bio-Fuel Policy and to encourage production/usage of ethanol, the central government apart from scaling up blending targets has also fixed remunerative ex-depot price of ethanol and waived excise duty on its supplies to OMCs during 2015-1, the minister pointed out.

He said the chemical industry has made representations regarding pricing of ethanol for supplies under EBP, adding that the matter is sub-judice at present.

Production of ethanol and its supplies under EBP at remunerative prices would help improve the liquidity position of sugar mills, enabling them to clear cane price dues to farmers, he added.