Sugar industry pins hopes on ethanol

Tuesday, 21 January 2003, 08:00 Hrs
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NEW DELHI: The Indian sugar industry, worried so long by piling stocks and falling prices, is happy with the government's decision to launch ethanol-blended petrol in a big way.

The ethanol will be derived from sugarcane.

The environment-friendly ethanol-based fuel, gasohol, will help the sugar industry utilise unused stocks of molasses besides bringing down India's crude oil import bill.

Globally, ethanol is used as a transport fuel, blending it in the range of five to over 25 percent with petrol. Brazil is the largest user of ethanol-blended petrol.

To start with, India has introduced five percent ethanol-mixed petrol in four of its major sugar-producing states. Nine states and five union territories are to be covered in the first phase of the introduction of gasohol and the remaining in the second phase by the yearend.

The move has, however, seen a slow start due to lack of infrastructure and adequate ethanol supplies. The sugar industry believes it was not given adequate indication to step up ethanol production.

M.N. Rao, secretary of Indian Sugar Mills Association (ISMA), told IANS: "Till new capacities are created, the sugar industry will not be able to ensure adequate supplies."

The largest producer and consumer of sugar, India annually churns out 18.5 million tonnes of sugar and about 80 million tonnes of molasses.

Currently four states -- Maharashtra, Andhra Pradesh, Punjab and Uttar Pradesh -- have started the supply of gasohol. By June end, five more states, including Goa, Gujarat, Haryana, Karnataka and Tamil Nadu and four union territories will begin supplies.

The government estimates the current consumption of petrol in the nine states and four union territories to be about 4.6 million tonnes. At the rate of five percent, around 320-350 million litres of ethanol will be required.

Of the 118 sugar factories with distilleries, while some are already in the process, many others are awaiting government notification on the release of funds from the Sugar Development Fund to access resources for modernisation and setting up ethanol production units.

"Once the government started the process of gasohol supplies, sugar units in several states began setting up ethanol production units," said a spokesperson for the National Federation of Co-operative Sugar Factories.

Though private industries are taking a lead, cooperatives are also contemplating investment for production of the green fuel.

Oil marketing companies having agreed to off-take ethanol at 17 per litre for the first three months till March 31. The price is substantially more than the landed cost of imported ethanol, mostly from Brazil.

Only Uttar Pradesh with 120 million litres and Maharashtra with about 100 million litres have surplus capacity for ethanol production. Both have agreed to make supplies available in nearby states.

In the case of Karnataka, ethanol production is currently only around 80 percent of the requirement, and in Andhra Pradesh the figure is 60 percent.
Source: IANS
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