Ethanol Blended Petrol Programme

#GS3 #Energy #Technology 

 

Cabinet approves Mechanism for procurement of ethanol by Public Sector Oil Marketing Companies under Ethanol Blended Petrol Programme.

 

Highlights

  • Cabinet Committee on Economic Affairs has approved the fixing higher ethanol price derived from different sugarcane based raw materials under the Ethanol Blended Petrol (EBP) Programme for the forthcoming sugar season 2020-21 during Ethanol Supply Year (ESY)  2020-21 from 1st December 2020 to 30th November 2021.
  • Also, the prices of ethanol obtained from C heavy molasses, B heavy molasses have been increased. The increase in price was around Rs 2 to 3 per litre. Additionally, the oil companies will now have to pay transportation charges and GST while procuring ethanol.
  • Remunerative price to ethanol suppliers will help in reduction of cane farmer’s arrears, in the process contributing to minimizing difficulty of sugarcane farmers.

 

Background

  • Government has been implementing Ethanol Blended Petrol (EBP) Programme wherein OMCs sell petrol blended with ethanol up to 10%.  This programme has been extended to whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands.
  • This was to reduce the energy dependence of India from oil imports and also to boost agriculture. Also, Ethanol Procurement Policy was adopted under the EBP programme.
  • In 2018, for the first time, Government of India notified administered price of ethanol based on the raw material used in production.

 

Why Sugarcane in specific?

  • The dues of sugarcane farmers have increased due to lower capability of sugar industry to pay the farmers. Thus, the Government of India has increased the prices of ethanol obtained from sugarcane to help sugar cane farmers.

 

Ethanol Blended Petrol Programme

  • Ethanol Blended Petrol (EBP) programme was launched in January, 2003. The programme sought to promote the use of alternative and environment friendly fuels and to reduce import dependency for energy requirements.
  • Under the programme, the GoI has set target of 10% blending target by 2022 and 20% by 2030.
  • The Oil Marketing Companies are bound to sell ethanol based petrol based on Bureau of Indian Standards Specifications.
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