India initiated the use of ethanol as an automotive fuel in the year 2003. The Ministry of Petroleum and Natural Gas (MoPNG) issued a notification in September 2002 for mandatory blending of 5 % ethanol in 9 major sugar producing states and four union territories from 2003. Due to ethanol shortage during 2004-05, the blending mandate was made optional in October 2004, and resumed in October 2006 in the second phase with a gradual rise to 10% blending. In 2008, the Ministry of New & Renewable Energy established a National Policy on Biofuels to limit the country's future carbon footprint and dependence on foreign crude.
Under this, the blending level of bio-ethanol at 5 % with petrol was proposed from October 2008, leading to a target of 20 % blending of bio-ethanol by 2017. It also laid down a roadmap for the phased implementation of the programme. This was taken up by the oil marketing companies (OMCs) in 20 states and 4 union territories.
The Indian sugar industry today is at a very critical juncture and needs investments for expansion, modernization, as well as implementation of ethanol plants Ii cogeneration power plants, for their long term integration. The recent Government policy has pegged 5%ethanol blending with fuel (with possibility to extend to 10% shortly), at an attractive price of Rs. 48.50/Liter. for ethanol. This provides an excellent. opportunity to the sugar factories to implement ethanol projects in the immediate future.
