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Topics Covered:

  1. Food processing and related industries in India- scope and significance, location, upstream and downstream requirements, supply chain management.




What to study?

For Prelims: Ethanol blended petrol programme, National Policy on Bio- fuels.

For Mains: Ethanol blending- significance, potential, challenges and solutions.


Context: CCEA has approved an increase in the price of ethanol to be procured by public sector oil marketing companies (OMCs) from sugar mills for blending with petrol for the 2019-20 supply year from December 1.

  • It has also allowed conversion of old sugar into ethanol.


What is ethanol?

Ethanol is basically alcohol of 99%-plus purity, which can be used for blending with petrol.

Produced mainly from molasses, a byproduct of sugar manufacture.


Benefits of the latest move:

There is a huge incentive to produce ethanol today. This has been additionally facilitated by the government mandating 10% blending of petrol with ethanol. If mills are able to divert more of cane juice for ethanol, it would mean producing less sugar. Since the country is producing too much sugar and is importing oil, the ethanol-blending programme is beneficial both for mills and for the country’s balance of payments.


Benefits of ethanol blending:

  1. Reduction in import dependency.
  2. Support to agricultural sector.
  3. Environmental friendly fuel.
  4. Additional income to farmers.


About Ethanol Blended Petrol (EBP) Programme:

Launched in 2003 on pilot basis.

The aim is to promote the use of alternative and environmental friendly fuels.

Implemented by the Ministry or Oil Marketing Companies (OMCs).



  • India is the third largest consumer of energy in the world after China and the US.
  • India is dependent on imports for about 82.1% of its crude oil requirement and to the extent of about 44.4% in case of natural gas.
  • India is expected to need 10 billion litres of ethanol annually to meet the 20% blending target in 2030 if petrol consumption continues to grow at the current pace. At present, the capacity stands at 1.55 billion litres a year.


Concerns and challenges:

  1. Consistent shortfall in supply of ethanol in the past, mainly on account of the cyclical nature of the sugarcane harvests in the country.
  2. Lack of an integrated approach in the EBP across its value chain.


Way ahead:

The National Policy on Bio-fuels has set a target of 20% blending of biofuels, both for bio-diesel and bio-ethanol. This will require an integrated approach in the Ethanol Blending Programme (EBP). The time is ripe for a cogent and consistent policy and administrative framework in the program implementation for the success of EBP.


Sources: the hindu.