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With the recent budget announcement from FM Nirmala Sitaraman, we can hope to see a paradigm shift in the sugar industry from its mainstream commodity market into the energy market. With the right move of the Indian government of increasing the ethanol blending in the conventional fuel, and the OMC (oil marketing companies viz, BPCL, HPCL, IOCL) regarding CBG (compressed biogas) made from scrubbing methanol in the CBG units of sugar mills as an alternative to the conventional CNG (compressed natural gas) will show a massive tick in the revenue of sugar mills and turn the local farmers.
India has an opportunity to create its own fuel!
With the central government’s decision to increase ethanol blending and promote the CNG vehicles, along with the pre-existing co-generation units, a considerable chunk of the fuel necessities of the nation can be fulfilled by the sugar industry alone.
Availability of green-energy means advancement towards environment-friendly means of transport.
The next obvious step in the automobile industry is the development of Flexi-cars, which can be run on any ethanol blending proportions. To bring about this significant change, the government has to work with private automobile giants such as Tata, M&M, and Suzuki. With the recent launch of iCNG Tiger and Tiago and sCNG Celerio, we see a positive growth towards a sustainable environment amongst industries and increasing awareness of green energy initiatives.
The increase of % blending per year from the FY 2019-2020 and 2020-2021 from 2% to 6% for B-heavy molasses ethanol, 0.5% to 1% for cane juice molasses ethanol, and 4.5% to 8% for C-heavy molasses ethanol resulted in an overall increase of 302 crore liters from 173 crore liters in ethanol production from sugar mills. This 129 crore increment in ethanol production is reflected in an employment surge and a rise in development amongst the local farmers. The recent average all-India ethanol blending percent is 8.53%, with an 18% increase in ethanol procurement from the sugar industry to 358 crore liters instead of last year’s 302 crore liters.
The goal is for India to become self-sufficient.
With the aim of 20% blending till the FY 2025-2026, the national ethanol requirement will jump to 1016 crore liters, a whopping 183% increase in 4 years. However, for this to happen, the sugar industry, the government, and the automobile sector have to work together with the sugar mills producing the required quantity, the automobile sector coming up with technological advances that can sustain 20% blended fuel engines, and the government incentivizing and promoting the use of blended fuels and Flexi-cars.
The financial institutes (FI) need to fund such projects on a larger scale by signing tri-partite agreements (TPA) between the banks, distilleries, and the OMCs. With a massive infrastructure and substantial investments already set up in states like Maharashtra, Karnataka, and Uttar Pradesh, the government and the FIs need to move swiftly on the same lines with a common goal of making India self-sufficient in terms of its fuel needs and reducing its dependency on Organization of petroleum exporting countries (OPEC)
The Sugar Industry in India is all set to change the game in the energy market of our nation.
It is a breakthrough for India in the right direction – A mindful and sustainable form of energy. With our carbon footprint breaking records worldwide, this green energy initiative is a step forward towards responsible and mindful energy consumption habits on a national level.
All eyes are set on how the government leads India on this revolutionary path towards complete self-sufficiency in coalition with the mills and OMCs.