The Cabinet Committee on Economic Affairs (CCEA) has approved an increase in the ethanol procurement price for public sector oil marketing companies (OMCs) from ₹56.58 per litre to ₹57.97 per litre.

Rationale Behind the Hike in Ethanol Procurement Prices

• Increased Ethanol Supply: Higher prices ensure adequate ethanol availability to meet the growing blending targets.
• Support for Farmers: Encourages the use of C Heavy Molasses (CHM), benefiting sugarcane farmers by providing an additional revenue source.
• Environmental Benefits: Reduces dependency on crude oil imports, lowers emissions, and supports the transition to greener fuels.
• Economic Gains: Saves foreign exchange by reducing fuel imports and strengthens the domestic ethanol industry.

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About Ethanol Blending

• Also known as: Ethyl alcohol.
• Sources: Ethanol is a biofuel produced from sugarcane, corn, rice, wheat, and biomass.
• Molasses: A byproduct of sugar manufacturing, primarily used for ethanol production.
• Categories of Molasses:
  • A Molasses (First Molasses): Intermediate by-product from initial sugar crystal extraction, containing 80-85% dry matter (DM).
  • B Molasses (Second Molasses): Similar DM content but with less sugar and no spontaneous crystallization.
  • C Molasses (Final Molasses/Blackstrap Molasses/Treacle): End by-product of sugar processing with 32-42% sucrose, used as a commercial feed ingredient.
    • It is also known as C Heavy Molasses (CHM).
• Production Process: Ethanol is produced through fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
• Applications:
  • Used as a biofuel, solvent, and disinfectant.
  • Applications in fuel blending, pharmaceuticals, alcoholic beverages, cosmetics, and chemical synthesis.
  • Also used in biodegradable plastics, agriculture, and cleaning products.

About Ethanol Blending

• Definition: The practice of mixing ethanol with gasoline to create a fuel mixture for internal combustion engines.

• Purpose: Reduces emissions and improves engine performance.
• Common Blends:
  • E20: Petrol blended with 20% ethanol.
  • E100: 93-93.5% ethanol blended with 5% petrol and 1.5% co-solvent.
• Flex-Fuel Vehicles (FFVs): Designed to operate on different ethanol blends, up to E100.

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About Ethanol Blending Programme

• Initiative: Launched by the Government of India to promote the use of ethanol as a renewable and environment-friendly fuel in petrol.
• Aim:
  • Reduce fuel imports.
  • Conserve foreign exchange.
  • Increase value addition in the sugar industry.
• National Policy on Biofuels 2018 Target: Achieve 20% ethanol blending in petrol by Ethanol Supply Year (ESY) 2025-26.
• Government Initiatives:
  • Fixing remunerative ethanol prices.
  • Simplifying procurement and supply procedures.
  • Waiving excise duty.
  • Providing financial assistance for ethanol production.

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