Fuelling green growth

India has come up with E-20 — a 20 per cent blend of ethanol and 80 per cent of petrol — two months ahead of time and presented it to the people in the Energy Week 2023. With the coordinated efforts of public sector petroleum marketing companies, retail sale of petrol with 20 per cent ethanol blending has started at select petrol pumps in 11 states and union territories of the country. However, the consumer will not be able to get the option of filling normal petrol other than blended ethanol because it may create confusion at petrol pumps. That's why, at present, only 'ethanol-blended fuel' is available at all the pumps. Earlier, there were plans to bring petrol with 20 per cent ethanol in April. To promote the use of biofuels to reduce emissions and dependence on imports, the government is fast-tracking ethanol blending with petrol, and aims to double its effort by 2025-26. Earlier, in 2014, the blending of ethanol in petrol was limited to 1.5 per cent.

The Government of India is promoting the Ethanol Blended Petrol (EBP) programme to enhance energy security, reduce import dependence on fuel, save foreign exchange, address environmental issues, and boost the domestic agriculture sector. India is the world's third-largest oil importer, relying on imports to meet more than 85 per cent of its demand. The focus on ethanol is having a better impact on the environment as well as on the lives of the farmers, as it provides another source of income to the farmers. Ethanol is extracted from spoiled food grains and agricultural residues like sugarcane, wheat, and broken rice. This reduces pollution, and farmers get a means of earning a separate income. Firstly, petrol prices are likely to come down with the use of ethanol-blended petrol. Secondly, those crops will be promoted in the country through which ethanol is extracted. The rest will also depend on the decision of the government as to how much the prices will be reduced.

The tax on ethanol and crude oil is different. In such a situation, the consumer is getting the benefit of a reduced tax on ethanol. The increase in the amount of ethanol does not seem to have any significant effect on vehicles with biofuel engines because now almost all the companies are making vehicles with biofuel engines. Owing to this, there will be no significant impact on the working capacity and mileage of the vehicles. Vehicles with flex-fuel engines can put a variety of fuels in the tank; and run on pure ethanol or a mixture of any proportion of ethanol with petrol. The engine design of every vehicle is different, and it is difficult to fit flex-fuel engines in old vehicles, but it can be done with some changes. However, the flex fuel engine will take time. It may be noted that last year, the government had set a target of mixing 10 per cent ethanol in petrol, which India achieved five months in advance during June 2022. Resultantly, the country saved a foreign exchange of Rs 53,894 crore. Also, 27 lakh tonnes of Greenhouse Gas (GHG) emissions have been reduced, and an immediate payment of over Rs 40,600 crore has been made to the farmers.

India is the fifth largest producer of ethanol in the world after the USA, Brazil, the European Union, and China. With more ethanol blending, the procurement of ethanol has now increased from 38 crore litres to 320 crore litres annually. Now that there is 20 per cent blending, the quantity of ethanol procurement is expected to increase further. Last year, oil companies spent Rs 21,000 crore on ethanol purchases. The deadline for making E-20 petrol available in the country has also been preponed to 2025, based on a 'pilot project', while the earlier deadline was 2030.

Several important steps have been taken by the Central government to promote green energy. India is becoming the world leader in the field of green hydrogen. The recently launched 'National Green Hydrogen Mission' is poised to give a new direction to the country in the 21st century. There is a possibility of a huge increase in energy demand in the country in the coming times. As a result, India remains a suitable place for investment in the energy sector. Despite the global crisis, India had been the most attractive destination in the world in 2022 due to its internal fighting ability. India is working on increasing the crude oil refining capacity from 250 million tonnes annually to 450 million tonnes. The gas pipeline network in the country is estimated to increase from the present 22,000-km network to 35,000 km in the next five years. India, today, is the world's most prominent voice in the energy transition framework and development of new resources. According to the International Monetary Fund (IMF), India will remain the fastest-growing economy in the world in 2023.

Ethanol is widely used for consumption around the world. Brazil presents a successful example of the use of ethanol, where about 40 per cent of vehicles are run on 100 per cent ethanol; the rest of the vehicles also use fuel mixed with 30-40 per cent ethanol. Vehicles are also running on ethanol in Sweden and Canada. A subsidy is also being given by the government for the use of ethanol in Canada. A major part of the eightfold increase in ethanol procurement has benefited India's sugarcane farmers. Uttar Pradesh, Maharashtra, Haryana, and other states in India produce sugarcane, which is the main source of ethanol. India is currently dependent on imports for 85 per cent of its crude oil requirement. In such a situation, the 'Biofuel Policy' will be very helpful, which will reduce the country's dependence on imports — thereby enabling India to become self-reliant in the energy sector by 2047.

Views expressed are personal