PSU oil companies announce Rs 6.87/litre incentive for ethanol production from C-heavy molasses

New Delhi: Oil marketing companies in the public sector have announced an incentive of Rs 6.87 per litre for the production of ethanol from C-heavy molasses.

C-molasses is a by-product of sugar factories and its utilisation for ethanol production is an effective way to promote a green economy.

The oil companies believe this incentive would maximise ethanol production from the C molasses route and improve the overall availability of ethanol for the ethanol blended petrol programme.

"Ensuring farmers' prosperity, saving precious foreign exchange and driving sustainability! Rs 6.87/litre incentive for ethanol from C molasses by Public Sector OMCs bolsters GreenEconomy and also further strengthens the foundation for a cleaner and more eco-friendly future with EthanolBlendedPetrolProgramme under the visionary leadership of PM Sh Narendra Modi ji," Union Petroleum Minister Hardeep Puri said in a tweet.

The Food Ministry in early December directed sugar mills not to use cane juice or syrup to produce ethanol.

The central government in mid-December allowed utilisation of juice as well as B-heavy molasses to produce the ethanol but capped the diversion of sugar at 17 lakh tonnes for the current marketing season.

The government's ambitious target of attaining 20 per cent ethanol-blended petrol by 2024-25 and 30 per cent by 2029-30 is likely to face setbacks due to the halt of ethanol production from sugarcane juice in 2023-24, Crisil said recently.

Of the total ethanol produced in the country, ethanol from cane juice notably accounts for 25-30 per cent while that from B heavy molasses accounts for over 60-65 per cent. Ethanol from C heavy molasses and grains accounts for the rest.

India has already rolled out 20 per cent blended fuel, though, in a phased manner, in April 2023 and widespread availability is expected in days to come.

E20 blending in petrol was introduced by the Centre to reduce the country's oil import cost, energy security, lower carbon emissions and for better air quality.

The government had advanced the target of E20 fuel from 2030 to 2025. (ANI)