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India Could Replace Gasoline Imports With Ethanol by 2020, Study Shows

According to this report, India can potentially harvest enough bagasse, rice husk and sugar waste to produce as much as 50 billion liters (13 billion gallons) of ethanol without relying on food crops or disrupting agricultural land-use, according to a report released  today by Renewable Energy Minister Farooq Abdullah.

That would be enough to replace 86 percent of gasoline demand and remove the need for imports, according to the report, done by Bloomberg New Energy Finance for Novozymes A/S, the world’s biggest maker of industrial enzymes.

Gasoline consumption is set to surge in Asia’s third- largest energy consumer as rising incomes spur demand for vehicles. Two-thirds of the country’s gasoline demand comes from two-wheeled passenger vehicles such as motorcycles, the report said.

If India doesn’t find alternatives, it could spend about $19.4 billion on gasoline imports by 2020, said the report, which assumes a crude oil price of $100 a barrel.

In contrast, the development of an ethanol industry could generate up to $20 billion of yearly revenue plus $1.6 billion in ethanol exports, it estimated.

Barriers include the lack of infrastructure to collect and transport agricultural residue and no clear targets or penalties from the government to promote development, it said.

The Ethanol blended petrol program has been something that government had announced as early as the year 2006 when they had mandated 5% ethanol blended petrol and had informed that the programme would become mandatory from November of 2006. Subsequently, the government dropped the plan as the Oil Ministry had then argued that since there were competing demands on ethanol supply by portable alcohol and chemical Industries, prices of ethanol would shoot up if the programme was made mandatory.

Since,  The Cabinet Committee on Economic Affairs (CCEA) in the middle of August last year, cleared a proposal to implement an ethanol blended petrolprogramme (EBPP) programme to enhance benefits to the sugarcane farmers in the country.

There has also been a lot of  divergent views from the Industry and the chemical and IMFL manufacturers have been opposing the mandatory 5% blending and also contend that in case EBPP is to be relaunched, the basis of working out ethanol price will be its calorific value and cane price.

The demand for alcohol requirement is another thing that has seen varied numbers by different industries in the country and this has given rise to numerous divergent views that the expert committee will have to take into account before final price is announced.

What is interesting to note here is that in India unlike Brazil,  the only feedstock is the byproduct molasses.  Hence no  farm land or a food crop are used for making bioenergy.

Panchabuta has not read the report yet and it is unclear if all these factors have been considered in the report mentioned above.

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