According to Business Standard, in response to demands from ethanol producers, the government is considering resuming the delivery of surplus FCI rice for ethanol production. The report indicates that the supply of cheap rice from FCI warehouses for the ethanol program, which has been suspended for several months, may potentially restart. Grain-based ethanol manufacturers have urged the government to resume these supplies, threatening to shut down their plants otherwise.
The media report also highlights that ethanol producers argue that despite the recent increase in Minimum Support Price (MSP) for paddy in the 2024-25 marketing season, maize prices have risen sharply to Rs 26-27 per kg from around Rs 22-23 per kg. However, there has not been a corresponding increase in the procurement price of ethanol produced from maize.
According to the Petroleum Planning & Analysis Cell (PPAC) Monthly Ready Reckoner report, ethanol blending with petrol reached 15.90% in June 2024, with cumulative blending from November 2023 to June 2024 at 13.0%.
The government has set a deadline to achieve 20% ethanol blending by 2025. To achieve the target of 20 per cent ethanol blending by 2025, approximately 1016 crore litres of ethanol are required, with the total demand for ethanol, including other uses, estimated at 1350 crore litres. Meeting this demand will necessitate approximately 1700 crore litres of ethanol production capacity by 2025, assuming plants operate at 80% efficiency. The government’s estimation considers the growth in petrol-based vehicles in the two-wheeler and passenger vehicle segments, along with projected Motor Spirit (MS) sales.
