New Delhi: To boost ethanol production in the country and to make cooperative sugar mills more viable, the government has allowed them to operate with grains like maize and damaged foodgrains in addition to sugarcane. For the purpose, the central government has notified a scheme under modified Ethanol Interest Subvention Scheme.
The conversion to multi-feedstock-based facilities would not only make the existing ethanol plants capable of operating when sugar-based feedstocks are not available for ethanol production, but will also improve efficiency and productivity of these plants. As a result, these cooperative ethanol plants will have increased financial viability.
The sugarcane crushing period is limited to just 4-5 months in a year due to which sugar mills can operate for a brief period of time. This further leads to a reduction in their overall operational efficiency and productivity.
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To ensure the functioning of cooperative sugar mills throughout the year, their existing ethanol plants can be converted into multi-feedstock-based facilities to use grains like maize and damaged foodgrains under the new modified scheme.
“Under the modified Ethanol Interest Subvention Scheme, government is facilitating entrepreneurs with interest subvention at 6% per annum or 50% of rate of interest charged by banks or financial institutions, whichever is lower, on the loans to be extended by financial institutions is being borne by the central government for five years including one-year moratorium,” the government said in a release.
With the scheme in place, the mills which currently use only sugarcane for ethanol production, will be incentivized to process other raw materials like maize and agricultural residues. The move will boost ethanol production in the country, which is used in petrol blends.
On 26 February, during the Advantage Assam 2.0 business summit in Guwahati, petroleum minister Hardeep S. Puri said that 19.6% ethanol blending has already been achieved.
This initiative aligns with the Ethanol Blended Petrol (EBP) programme targeting 20% ethanol blending with petrol by 2025.
