On the ethanol blending programme

(Source – The Hindu, International Edition – Page No. – 10)

Topic: GS3 – Environment – Clean Energy

Context

●  India is progressing towards its 20% ethanol blending target by 2025-26, marked by increased production and capacity. ●  However, concerns about food security arise due to rising maize imports and water usage for sugarcane. ●  Balancing ethanol production with these challenges remains a key issue in policy discussions.

 

Overview of Ethanol Blending Targets

• India aims to blend 20% ethanol with petrol by 2025-26, with progress marked by milestones in blending percentages and increased ethanol production capacity.
• The target involves producing approximately 1,000 crore litres of ethanol. Current blending rates are between 13% to 15%, a significant increase from around 8% in 2021.
• Ethanol production capacity has expanded considerably, reaching 1,380 crore litres as of December 2023, with 875 crore litres from sugarcane and 505 crore litres from foodgrains.

Food vs. Fuel Debate

• The food versus fuel equation remains a concern, as increased ethanol production has led to a rise in maize imports due to its use in ethanol production, exacerbated by restrictions on using sugarcane products.
• The industry argues that India has sufficient food grains and sugar surpluses, but concerns about potential wastage and spoilage due to large food stocks are noted.
• To address food security and sustainability issues, there is a call to diversify from first-generation (1G) ethanol to second-generation (2G) and third-generation (3G) ethanol, which are less impactful on food resources.

Ethanol Production Capacity and Investments

• To meet the 20% blending target, significant investments have been made in ethanol production.
• The sugar industry alone has invested approximately ₹40,000 crore in expanding capacity, with 92 crore litres of new capacity added in two years.
• The current ethanol production capacity has nearly reached the target, but with a higher proportion of sugarcane-based ethanol.

Government Policies and Production Dynamics

• Interest subvention programs have supported the expansion of ethanol production capacity.
• There is industry demand for extending these programs and securing long-term contracts with Oil Marketing Companies (OMCs) to maintain momentum and create surplus capacity.
• The diversion of sugarcane products to ethanol production has led to restrictions on the use of B-heavy molasses and sugarcane juice, which could affect sugar stocks.
• These restrictions may be lifted as fears of depleting sugar surpluses are deemed unfounded.

Water Usage and Sustainability Concerns

• Expanding sugarcane production to meet ethanol blending targets requires significant additional water.
• To sustain 50% of the 1,000 crore litres from sugarcane, an extra 400 billion litres of water would be needed, potentially impacting agricultural sustainability by diverting irrigation from essential food crops.
• To compensate for restrictions on molasses, grain-based distilleries, primarily using maize, have been operating at full capacity.

Economic and Agricultural Impact

• India, a major maize producer, faces increased maize imports and potential price hikes due to the diversion of maize for ethanol production.
• This could negatively affect the poultry sector and other major uses of maize.
• The Commerce Ministry reported a significant increase in maize imports from $39 million in 2023-24 to $103 million in the April-June period of this year.
• To meet the 20% blending target, substantial additional maize cultivation is required, impacting the typical cultivation area.

Vehicle Performance and State-Level Impacts

• Ethanol blending is expected to reduce greenhouse gas emissions and save foreign exchange, while also boosting the rural economy.
• However, higher ethanol content may affect the performance of existing vehicles, which may require engine re-tuning or changes to E20-supported materials.
• Different states view the ethanol policy differently. In some states, fuel ethanol pricing and its impact on liquor production determine the attractiveness of ethanol production. For instance, some states focus on maximising ethanol output from sugarcane, while others consider alternatives like maize.

Conclusion

• The expansion of ethanol production in India involves a complex interplay of food security, water usage, economic impacts, and state-level policies.
• While progress towards blending targets is notable, balancing ethanol production with food security and sustainability concerns remains crucial.

Practice Question:  Discuss the challenges and implications of India’s ethanol blending target on food security and agricultural sustainability. How can the government address these issues effectively? (250 Words /15 marks)