UNION CABINET APPROVES REVISED ETHANOL PROCUREMENT PRICE FOR OMCs

GS3 ECONOMIC DEVELOPMENT

The revised administered ex-mill price of ethanol derived from C Heavy Molasses (CHM) for the Ethanol Supply Year (ESY) 2024-25 (spanning November 2024 to October 2025) has been set at Rs. 57.97 per litre, up from Rs. 56.58.

This adjustment is part of the Ethanol Blended Petrol (EBP) Programme and aims to provide price stability and ensure attractive remuneration for ethanol suppliers and sugarcane farmers. The revision also supports the environmental goals of the EBP Programme and guarantees adequate ethanol supply to meet blending targets.

Key Features of the Ethanol Blended Petrol (EBP) Programme:

• Objective: The EBP Programme mandates Oil Marketing Companies (OMCs) to blend up to 20% ethanol with petrol, promoting the use of alternative, eco-friendly fuels, reducing dependence on fuel imports, and bolstering the agriculture sector.
• Ministry: Ministry of Petroleum and Natural Gas.
• Revised Ethanol Blending Target: The target for 20% ethanol blending in petrol has been advanced to 2025-26, earlier set for 2030.

Achievements of the EBP Programme:

• Foreign Exchange Savings: The EBP Programme has saved approximately ₹1.13 lakh crore over the last decade (as of December 2024).
• Increased Ethanol Blending: The volume of ethanol blended by OMCs surged from 38 crore litres in the 2013-14 Ethanol Supply Year to 707 crore litres in the 2023-24 period, reflecting an average blending of 14.6%.

Additional Initiatives for Biofuel Promotion:

• Pradhan Mantri JI-VAN Yojana: This scheme offers financial support for setting up Second Generation (2G) ethanol projects using lignocellulosic biomass and other renewable feedstocks.
• National Policy on Biofuels, 2018: The policy categorizes biofuels into First, Second, and Third Generations, laying the foundation for their future growth.
• GST Reduction: The Goods and Services Tax (GST) on ethanol for the EBP Programme has been reduced to 5%, further incentivizing its use.

Generations of Biofuels:

1. First Generation: Biofuels derived from existing crops such as corn, sugarcane, and starch-based feedstocks.
2. Second Generation: Biofuels produced from lignocellulosic feedstocks, including agricultural residues and municipal wastes.
3. Third Generation: Biofuels obtained through microbiological processes involving species like yeast and algae. These biofuels are considered more sustainable and efficient in the long run.