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Informist, Friday, Oct. 25, 2024

 

By Afra Abubacker

 

NEW DELHI – More ethanol will come from grain-based distilleries than sugar-based in the upcoming supply year that starts November. Of the 8.37 billion litres ethanol allocated to be supplied to oil marketing companies in 2024-25, 62.7% will be sourced from grains and 37.3% from sugarcane, results of a tender show. "We were expecting allocation to be 50-60 with sugar share (in ethanol) at 50% and grains share at 60%," a sugar industry official said. 

 

Oil marketing companies had on Sept. 26 invited bids for 9.16 billion litres ethanol for which distillery units offered to supply 9.70 billion litres. However, the feedstock-wise allocation has only been issued for 8.37 billion litres. Experts say more ethanol allocations are likely later in the year to meet the requirements of oil marketing companies.

 

As per the given feedstock-wise allocation, around 4.31 billion litre ethanol will come from maize, 1.89 billion litres from sugarcane juice, 1.14 billion litres from B-heavy molasses, 938 million litres from damaged foodgrains, and 91.5 million litres from C-heavy molasses. India is likely to divert 3.75-4.00 million tonne sugar to make 3.12 billion litre ethanol from sugarcane by-products, industry officials said. 

 

"Further allocations will mostly be for Q3(May-Jul) and Q4(Aug-Oct)," an industry official said. "While bidding, most distillery units made offers for Q1(Nov-Jan) and Q2(Feb-Apr). Only units with storage offers for Q3 and Q4," he added. 

 

The first two quarters of the ethanol year coincide with the active sugarcane crushing period and the new crop arrival season of maize. Sugarcane is harvested from September and has to be immediately crushed to ensure higher sugar recovery. Kharif maize is harvested from December to February and rabi from April to June. Ethanol is made from starch-containing feedstock like molasses and grains. 

 

In the ethanol basket, ethanol from maize is priced at INR 71.86 a litre, making it the premium feedstock for biofuel production. Ethanol from damaged food grain is priced at INR 64.00 a litre. Ethanol from sugarcane juice is priced at INR 65.61 a litre, B-heavy molasses at INR 60.73 a litre, and C-heavy molasses at INR 56.28 a litre. For the ethanol year 2023-24, the government only increased ethanol prices from C-heavy molasses, as it restricted ethanol production from the other two sugarcane-based feedstocks.

 

The production capacity of grain-based distillery units has increased amid the government's push for maize as a go-to feedstock for ethanol. "After a relatively slow take-off, grain-based ethanol production capacities grew 30% on year in 2022-23 to 5.1 billion litres and could rise further to 6.5-7.5 billion litres by 2025-26 or 2026-27, potentially contributing to 60% of the total ethanol demand for fuel, according to India Ratings and Research.

 

Distilleries have urged the government to increase the rate of ethanol made from both feedstocks to give a boost to the ethanol blending program. Oil companies purchase ethanol from distilleries to blend the biofuel with petrol and achieve blending targets. To reduce dependence on crude oil and promote green mobility, India has set a target of achieving 15% ethanol blending with petrol in 2023-24 (Nov-Oct) and achieved 13.6% ethanol blending as of Sept. 1, according to the Ministry of Petroleum and Natural Gas. End

 

Edited by Deepshikha Bhardwaj

 

 

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