NEW DELHI: Prime Minister Narendra Modi on Saturday raised his bet on ethanol in India’s fight against climate change by advancing the date for 20% blending of petrol by 5 years to 2025 and launching a pilot project at three Pune petrol pumps for running vehicles fully on the ‘swadeshi’ fuel.
“The country is fast moving towards clean energy and we will see a great benefit from this (rapid ethanol blending), especially in the agriculture sector,” he said addressing a function to mark World Environment Day.
The PM unveiled a roadmap prepared jointly by the oil ministry and government think-tank Niti Ayog for developing an ethanol economy in the country. The roadmap reckons 20% blending of petrol with ethanol will result in an annual saving of $5 billion, or Rs 30,000 crore in India’s oil import bill. India’s net petroleum import bill stood at $551 billion in 2020-21.
For the uninitiated, ethanol is ethyl alcohol – also referred as ‘drinking alcohol’ – made from molasses, grains and farm waste. The pandemic has made ethanol a part of our everyday life as one of the alcohol options for hand sanitisers. It is less polluting, and offers equivalent efficiency at a lower cost than petrol by raising the octane level. Petrol 20% laced with ethanol is known as ‘E20’ and ethanol for automotive use is known as ‘E100’.
“Seven years ago, there was barely any discussion on ethanol. But now, it is connected to our 21st-century goals… In 2013-14, 38 crore litre of ethanol was bought as compared to over 320 crore litre today, which is about eight times more. This is worth Rs 21,000 crore, a lot of which has gone to farmers. When we achieve 20% ethanol blending, imagine how much money farmers will make,” he said. In 2014, the country had 1.5% ethanol blending, which has now gone up to 8.5%.
A 5% ethanol blending programme for petrol and diesel was first launched by the Atal Bihari Vajpayee government in 2001 with three pilot projects covering 300 petrol pumps in Maharashtra and UP under then oil minister Ram Naik’s watch. The programme progressed in fits and starts under the Manmohan Singh-led UPA governments till the Modi government sharpened its focus on the swadeshi fuel after coming to power in 2014.
Brazil is the world leader in ethanol use and has fuels blended up to 28%. The country has ‘flexi’ engines running on gasoline or gasohol – the other name for ethanol-blended fuels. This gives consumers the freedom to choose the fuel on any given day, based on the price advantage of the options and distance travelled. The US is the next major market, followed by Europe.