New Delhi: Sugar mills have contracted to supply 170 crore litres of ethanol to oil marketing companies (OMCs) for the year ending November and out of that 92.5 crore litres have been delivered so far for blending with petrol, according to industry data.
The OMCs have been able to achieve over 5 per cent blending of ethanol with petrol.
During the previous ethanol supply year 2018-19 (December to November), 190 crore litres of ethanol were supplied.
“Ethanol supply contracts for 170 crore litres have been entered into between ethanol manufacturers/sugar mills and oil marketing companies (OMCs) for the current ethanol supply year (Dec-Nov) 2019-20,” the Indian Sugar Mills Association (ISMA) said in a statement.
The association said 92.5 crore litres of ethanol have been supplied to the OMCs between December 1, 2019, and June 22, 2020, achieving an average all-India blending of 5.09 per cent with petrol till then.
The blending levels achieved in some states, including Uttar Pradesh, Haryana, Punjab, Uttarakhand, Bihar and Karnataka, is much higher at 8.5-9.8 per cent with petrol.
ISMA said that B-molasses and sugarcane juice have been diverted away from sugar, to manufacture and supply 58 crore litres of ethanol to OMCs so far.
As per the contracts, another 23 crore litres of ethanol will further be manufactured from B-molasses and cane juice for supply in the balance period up to November 30, 2020.
“This use of B-molasses and cane juice into production ethanol, and not for sugar production, will result in a diversion of sugar of around 8 lakh tonnes,” it said.
The diversion will not only reduce surplus sugar availability in the country, but also reduce the carrying costs to that extent for the sugar mills.
It also result in better returns to mills because ethanol prices fixed by the government are more remunerative than sugar currently.
“Despite the fall in petrol consumption/sales during the lockdown period, the supplies of ethanol were not too badly affected, and sugar mills have been able to supply as per the contracts during the lockdown too,” ISMA said.
ISMA said the ethanol supply will fall this marketing year, because of drought in Maharashtra and Karnataka and some other states in South India that led to decline in production of sugarcane and sugar.
With better rainfall and water availability, the acreage under sugarcane for the next season 2020-21 is back to normal, and sugarcane production is expected to improve again.
Therefore, the government targets an ethanol production and supply target of 300-350 crore litres in 2020-21, and aims to achieve 7.5-8 per cent ethanol blend levels with petrol.
As laid down in the National Biofuel Policy, 2018, the government intends to achieve ethanol with petrol blend levels of 10 per cent by 2022 and 20 per cent by 2030.
