Centre approves 422 ethanol schemes to increase investment and annual capacity

The government has granted preliminary approval to 422 ethanol schemes, which will increase annual capacity by 1,675 crore litres. These ventures, which are expected to pull in a total investment of Rs 41,000 crore, would receive a soft loan from banks on more favorable terms. This will favor farmers and speed up the ethanol-to-petroleum blend scheme, reducing dependence on imported crude.

The centre has set an ethanol blend target of 8.5 percent this year, 10 percent the next year, and 20 percent by 2025. “22 states have submitted proposals. As a result, ethanol production will be spread across the world, benefiting farmers. “Through these new ventures, we plan to nearly double our current production potential of 684 crore litres in the next three years,” a senior food ministry official said.

According to him, the increase in ethanol-based ventures is attributable to the government's recent decision that grain-based distilleries would be qualified for subsidised credit facilities as well. For five years, the government offers a 6% interest subsidy, or half the interest rate paid by banks, plus a one-year moratorium.

“Of the 422 proposals received, 201 came from grain-based distilleries, and 141 came from distilleries that used both grain and molasses as feedstock. We expect more projects like this to emerge,” he added. According to the representative, the oil marketing companies will need 1,000 crore litres of ethanol to meet the 20 percent ethanol blend mark.

In addition, the chemical industry and other industries would need 400 million litres of ethanol.