The Grain Ethanol Manufacturers Association (GEMA) has called on the government to release surplus FCI rice to the grain ethanol industry and ensure price equalization for grain-based ethanol.
In a formal appeal submitted to Tarun Kapoor, Advisor to the Prime Minister, GEMA outlined the critical challenges faced by the grain ethanol sector. The association is seeking government intervention to address escalating feedstock costs, which threaten the economic viability of ethanol production.
In a letter to Kapoor, GEMA President Dr. C.K. Jain highlighted the positive impact of the Ethanol Blended Petrol Program (EBPP), which has attracted investments exceeding Rs. 40,000 crore and significantly boosted rural and agricultural sectors. However, GEMA pointed out that the rapid growth of the grain ethanol industry has driven up feedstock prices, making ethanol production economically unviable.
To tackle these issues, GEMA proposed the following measures:
Issuance of surplus FCI rice: Allocate surplus FCI rice to the Grain Ethanol Industry until sufficient maize crop becomes available to meet industry demands.
Linking FCI rice pricing to ethanol procurement rates: Align the pricing of surplus FCI rice with the ethanol procurement formula specified in tenders issued by OMCs.
Maize ethanol pricing: Establish a link between the pricing of maize-based ethanol and the MSP of maize to ensure fair valuation.
Price equalization: Standardize the pricing of all grain-based ethanol based on a weighted average of the allocated quantities for ESY (C-1, C-2) 2024-25, as determined by the OMCs.
The association has urged prompt action, emphasizing the strategic importance of ethanol as a renewable energy source and its role in reducing India’s dependence on imported fossil fuels.
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