Context:

• The Department of Food and Public Distribution, Government of India, has implemented the Revised Ethanol Interest Subvention Scheme to ensure the economic and operational stability of Cooperative Sugar Mills (CSM).
• The scheme aims to convert existing sugarcane-based ethanol plants into multi-feedstock-based plants, enabling them to use maize and damaged food grains (DFG) as alternative raw materials.

Key Points:

1. Current Challenges:

• The sugarcane crushing season lasts for only 4-5 months per year, limiting the operation period of sugar mills.
• When sugarcane is unavailable, ethanol production halts, leading to economic and operational losses.

2. Objectives of the Scheme:

• Enable cooperative sugar mills to produce ethanol using maize and damaged food grains in addition to sugarcane.
• Enhance the operational efficiency and productivity of sugar mills.
• Achieve the 20% ethanol blending target (EBP) by 2025.

3. Interest Subvention Provisions:

• The government will provide an interest subsidy of 6% per annum or 50% of the applicable interest rate, whichever is lower.
• This subsidy will be provided for five years, including a one-year moratorium period.

4. Potential Benefits:

• Sugar mills can operate throughout the year, reducing idle time.
• Increased use of maize and damaged food grains, creating a new market for farmers.
• Enhanced ethanol production, reducing dependence on petrol imports.
• Environmental benefits, as biofuel blending will reduce carbon emissions.

India’s Ethanol Blending Program (EBP):

• 10% Blending (E10): India achieved the 10% ethanol blending target by 2021-22.
• 20% Blending (E20): Initially targeted for 2030, but now advanced to 2025-26.
• Increase in Blending Rate:
• In 2014, the ethanol blending rate was 1.53%.
• In 2024, it has increased to 15%.
• The target is to reach 20% by 2025.

Ethanol: General Information

What is Ethanol?

• Ethanol is a chemical compound produced through the fermentation of agricultural products such as sugarcane and maize.

Key Properties:

• Chemical Formula: C₂H₆O
• Molecular Weight: 46.07 g/mol
• Boiling Point: 78.37°C
• Density: 0.789 g/cm³
• Solubility: Completely soluble in water
• Appearance: Volatile, flammable, colorless liquid with a characteristic alcoholic odor and pungent taste.

Pradhan Mantri JI-VAN Yojana (PM JI-VAN Yojana):

• Launch: March 2019
• Objective:
• To provide financial assistance for the establishment of second-generation (2G) ethanol projects using lignocellulosic biomass and other renewable feedstocks.
• Total Financial Outlay: ₹1969.50 crore for the period 2018-19 to 2023-24.
• Key 2G Ethanol Projects under PM JI-VAN Yojana:
• First 2G Ethanol Plant inaugurated on August 10, 2022, at Panipat, Haryana (set up by Indian Oil Corporation Ltd.).
• Other 2G Commercial Projects:
• BPCL (Bharat Petroleum Corporation Ltd.) - Bargarh, Odisha
• HPCL (Hindustan Petroleum Corporation Ltd.) - Bathinda, Punjab
• NRL (Numaligarh Refinery Ltd.) - Numaligarh, Assam