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Ethanol Blended Petrol (EBP) Programme

1. Government has been implementing Ethanol Blended Petrol (EBP) Programme throughout the country except Union Territories of Andaman Nicobar and Lakshadweep islands, wherein OMCs sell petrol blended with 10% ethanol.

2. To increase indigenous production of ethanol the Government since 2014 took multiple interventions like:-

  • Re-introduction of administered price mechanism;
  • Opening of alternate route for ethanol production;
  • Amendment to Industries (Development & Regulation) Act, 1951 which legislates exclusive control of denatured ethanol by the Central Government for smooth movement of ethanol across the country;
  • Reduction in Goods & Service Tax (GST) on ethanol meant for EBP Programme from 18% to 5%;
  • Differential ethanol price based on raw material utilized for ethanol production;
  • Extension of EBP Programme to whole of India except islands of Andaman Nicobar and Lakshadweep wef 01st April, 2019;
  • Interest Subvention Scheme for enhancement and augmentation of the ethanol production capacity by Department of Food and Public Distribution (DFPD);
  • Publication of Long Term Policy on ethanol procurement.

3. For the first time during ethanol supply year 2018-19, following raw materials apart from C heavy molasses were allowed for ethanol production viz. B heavy molasses, sugarcane juice, sugar, sugar syrup, damaged food grains like wheat and rice unfit for human consumption. Also, different ex-mill price of ethanol, based on raw material used for ethanol production, was fixed by the Government in case of sugarcane juice/sugar/sugar syrup, B heavy molasses and C heavy molasses.

4. The aforesaid actions helped in increasing ethanol procurement by PSU OMCs from 38 crore litres during Ethanol Supply Year (ESY) 2013-14 (December, 2013 to November, 2014) to 188.6 crore litres during 2018-19 (December, 2018 to November, 2019) thereby achieving average blend percentage of 5.00% in ESY 2018-19.

5. Under the EBP Programme, the target for ongoing ESY 2019-20 (December, 2019 to November, 2020) is 7% which has to be progressively increased to 10% by ESY 2021-22.

6. Major reasons cited for lower offers/supplies during ongoing ESY 2019-20 is due to low production of Sugarcane crop in Maharashtra & Karnataka, production not started by new distilleries who had participated in the tender etc.

7. With a view to achieve 10% ethanol blending in petrol by 2021-22 and 20% by 2030, constraint in available ethanol distillation capacity was identified as one of the actionable point. In order to address the ethanol distillation capacity constraint, Department of Food and Public Distribution (DFPD) notified a Scheme on 19th July, 2018 for extending financial Assistance to sugar mills for enhancement and augmentation of the ethanol production capacity.

8. MoP&NG has also issued a 'Long Term Ethanol Procurement Policy' under EBP Programme on 11.10.2019.

For Detailed Policy/Acts/Regulations Click here.

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