Ethanol Procurement Price Revised for 2024-25

The Cabinet Committee on Economic Affairs (CCEA) in India has approved a new ethanol procurement price for the Ethanol Supply Year (ESY) 2024-25. This decision is aimed at enhancing the Ethanol Blended Petrol (EBP) Programme. The revised price for ethanol derived from C Heavy Molasses is set at Rs.57.97 per litre, up from Rs.56.58 per litre. This adjustment supports both price stability for suppliers and environmental goals.

Overview of the Ethanol Blended Petrol Programme

The EBP Programme allows petrol to be blended with up to 20% ethanol. This initiative promotes alternative fuels and reduces reliance on crude oil imports. The programme has been progressively implemented across India, aiming to benefit both the economy and the environment.

Impact on Foreign Exchange and Oil Imports

The blending of ethanol in petrol has led to savings in foreign exchange. Over the last decade, the programme has saved approximately Rs.1,13,007 crore. Additionally, it has substituted around 193 lakh metric tonnes of crude oil. These figures highlight the economic advantages of increasing ethanol usage.

Support for Sugarcane Farmers

The government ensures that sugarcane farmers benefit from the ethanol pricing structure. Alongside the procurement price, GST and transportation costs will be separately paid. This approach enhances the income stability of farmers involved in sugarcane cultivation.

Blending Targets and Future Goals

The Government of India has revised its blending target from 2030 to 2025-26. The goal is to achieve 20% ethanol blending by the end of this period. For the current ESY 2024-25, the target is set at 18%. This accelerated timeline demonstrates the government’s commitment to renewable energy sources.

Infrastructure Development and Investment

The government has facilitated infrastructure improvements to support ethanol production. This includes increasing distillation capacity to 1713 crore litres per annum. Long-Term Off-take Agreements (LTOAs) are being established to encourage the development of Dedicated Ethanol Plants (DEPs) in deficit states.

Environmental Benefits of Ethanol Blending

Ethanol blending contributes to environmental sustainability. It reduces greenhouse gas emissions and promotes cleaner fuel alternatives. The government’s push towards ethanol is aligned with global efforts to combat climate change.

Employment Opportunities and Economic Growth

The expansion of the ethanol industry has created numerous employment opportunities. Investments in distilleries, storage, and logistics facilities have stimulated economic growth. This development supports the broader vision of Atmanirbhar Bharat, or self-reliant India.

Conclusion of the Ethanol Initiative

The ethanol procurement price revision underlines the government’s commitment to renewable energy. It aims to enhance the EBP Programme and support various stakeholders, including farmers, industries, and consumers.

Questions for UPSC:

1. Discuss the role of alternative fuels in achieving energy security in India.
2. Critically examine the impact of the Ethanol Blended Petrol Programme on the Indian economy.
3. Explain the significance of renewable energy in mitigating climate change challenges.
4. What is the importance of government policies in promoting agricultural sustainability? Discuss with suitable examples.

Answer Hints:

1. Discuss the role of alternative fuels in achieving energy security in India.

1. Alternative fuels, like ethanol, reduce dependency on imported crude oil, enhancing energy security.
2. They contribute to diversifying the energy mix, making the energy supply more resilient.
3. Promoting local production of alternative fuels supports rural economies and agricultural sectors.
4. Utilization of alternative fuels decreases greenhouse gas emissions, aligning with environmental goals.
5. Government initiatives, such as the Ethanol Blended Petrol Programme, facilitate the transition to alternative fuels.

2. Critically examine the impact of the Ethanol Blended Petrol Programme on the Indian economy.

1. The programme has led to substantial foreign exchange savings, approximately Rs.1,13,007 crore over a decade.
2. It has resulted in the substitution of around 193 lakh metric tonnes of crude oil, reducing import costs.
3. Increased ethanol blending supports the agricultural sector, particularly sugarcane farmers, enhancing their income stability.
4. Investment in ethanol production infrastructure stimulates job creation and economic growth.
5. The initiative promotes sustainable energy practices, contributing to long-term economic stability.

3. Explain the significance of renewable energy in mitigating climate change challenges.

1. Renewable energy sources, like ethanol, reduce greenhouse gas emissions compared to fossil fuels.
2. They promote sustainable practices, aiding in the transition to a low-carbon economy.
3. Investing in renewable energy enhances energy independence and security, reducing reliance on finite resources.
4. Renewable energy initiatives can stimulate economic growth through job creation in new industries.
5. They align with global climate agreements and commitments, encouraging international cooperation on climate action.

4. What is the importance of government policies in promoting agricultural sustainability? Discuss with suitable examples.

1. Government policies, like the revised ethanol procurement price, provide financial stability for farmers.
2. Subsidies and incentives for sustainable practices encourage farmers to adopt eco-friendly methods.
3. Long-term agreements for ethanol supply promote investment in agricultural infrastructure and technology.
4. Policies supporting alternative crops can diversify income sources and reduce dependency on single crops.
5. Successful examples include the Ethanol Blended Petrol Programme, which boosts sugarcane farming and rural economies.