India brings forward target of 20% ethanol blending in petrol: The impact
The central government on Wednesday announced advancing the target date for achieving 20 per cent ethanol-blending with petrol by two years. According to government notification, the increased ethanol blending will be applicable from April 2023.
Last year, the government had set a target of reaching 10 per cent ethanol-blending in petrol (10 per cent of ethanol mixed with 90 per cent of diesel) by 2022, and 20 per cent doping by 2030. Earlier this year, the target for 20 per cent blending was brought forward to 2025.
"The Central Government hereby directs that the oil companies shall sell ethanol-blended petrol with a percentage of ethanol up to 20 per cent as per the Bureau of Indian Standards specifications, in the whole of the States and union territories," the oil ministry said in a gazette notification. "This Notification shall come into force with effect from the 1st April 2023".
How will this benefit India?
India is the world's third-biggest oil importer, relying on foreign suppliers to meet over 85 per cent of its demand. The move will help reduce the country's dependence on costly oil imports.
Wednesday's publication comes after changes earlier this week by the government on rules for companies to set up standalone ethanol production units, aiming to facilitate those projects.
India has also been giving soft loans to sugar mills to increase ethanol production capacity by adding distillation infrastructure to existing plants.
How will the country meet the target?
As much as 4 billion litres of ethanol will be needed for achieving the current applicable 10 per cent mixing ratio. For 20 per cent by 2023, 10 billion (1,000 crore) litres will be needed.
Most of the additional ethanol production will come from sugar cane processing, so less cane will likely be used to make sugar.
The sugar industry will divert 6 million tonnes of surplus sugar to produce 7 billion litres of the ethanol needed, while the remaining ethanol will be produced from excess grain.
The impact on auto industry
Large volumes of E20 by 2023, however, will depend on how quick car manufacturers can adapt, since it will require new engine specifications.