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NEW DELHI – The West Indian Sugar Mills Association has written to the food ministry for permission to use maize as a feedstock for ethanol production when there is shortage of sugarcane due to drought, an industry source said.
“WISMA, Maharashtra has written in support of this to the food ministry saying that in years of drought, they can better utilise their capacity, if they are allowed to use maize for ethanol production,” the source said.
In a meeting with industry and state government officials, a few weeks ago, Food Secretary Sudhanshu Pandey had also conveyed the Centre’s desire that ethanol production and supplies from other feedstock, including maize, should be encouraged.
“The food ministry is also looking at using maize and damaged foodgrains in the existing distilleries, including with sugar mills to supplement their current production,” the official said.
In the US, the world’s largest producer of ethanol, a vast majority of the biofuel is produced from corn, while Brazil, the second-largest producer, primarily uses sugarcane.
Currently, ethanol is manufactured from 100% sugarcane juice, sugar syrup, B- and C-heavy molasses, and damaged foodgrains such as broken rice and wheat which is unfit for human consumption.
In the last three tenders floated by oil companies for supply of 5.11 bln ltr of anhydrous denatured ethanol in 2019-20 (Dec-Nov), mills are under contracts to supply 1.94 bln ltr of the biofuel. Of this, mills have already supplied 1.35 bln ltr of the biofuel as of Monday.
Bharat Petroleum Corp, Indian Oil Corp, and Hindustan Petroleum Corp buy ethanol from sugar mills at fixed prices as it is mandatory to blend petrol with the biofuel.
As of Monday, the rate of ethanol blending in petrol in India is at 5.1%, the Indian Sugar Mills Association said.
As per the National Biofuels Policy 2018, the government aims to achieve ethanol-petrol blending rate of 10% by 2022 and 20% by 2030.In 2020-21 ethanol season, the Centre expects sugar mills to supply 3.0-3.5 bln ltr of ethanol to oil marketing companies to achieve 7.5-8.0% of ethanol blending in petrol.
Over the last two years, the government has taken a slew of measures to improve liquidity with sugar mills and enable them to pay cane dues. It is giving loans to sugar mills with interest subvention of 40.45 bln rupees for a period of five years for enhancement and augmentation of ethanol production capacity.However, banks have been reluctant in giving loans to some mills due to their stressed balance sheets.
Last year, the Centre had raised prices at which oil marketing companies would buy ethanol from mills. It increased the price of ethanol made from B-heavy molasses to 54.27 rupees a ltr for 2019-20 (Dec-Nov) from 52.43 rupees a ltr in 2018-19.It also raised the price of ethanol made from 100% cane juice and C-heavy molasses to 59.48 rupees a ltr and 43.75 rupees a ltr, respectively.