Minister on Licences for new sugar factories and ethanol

Context:

Urging farmers in Maharashtra and other parts of the country to focus on producing ethanol from sugarcane juice instead of sugar, Union Minister of Road Transport and Highways said there was a pressing need to stop issuing fresh licenses to set up sugar factories in the State and elsewhere.

Relevance:

GS-III: Environment and Ecology (Conservation of Environment, Environmental Pollution & Degradation), GS-III: Agriculture (Agricultural Pricing and Marketing)

Dimensions of the Article:

1. Sugar Industry in India
2. Issues with the Sugarcane Industry
3. Highlights of what the minister said about Sugar industry
4. What is Ethanol fuel?
5. Ethanol Blended Petrol Programme (EBP)
6. Roadmap for Ethanol Blending in India by 2025
7. Advantages of Ethanol Blending

Sugar Industry in India

• India is the world’s largest consumer of sugar.
• India is the world’s largest producer of sugarcane and second largest producer of sugar after Cuba.
• Some 50 million farmers and millions of more workers, are involved in sugarcane farming.
• Sugar industry is broadly distributed over two major areas of production- Uttar Pradesh, Bihar, Haryana and Punjab in the north and Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh in the south.
• The major sugar producing states are Maharashtra, Uttar Pradesh and Karnataka in India.
• Uttar Pradesh is the highest sugarcane producing State in the sub-tropical zone.
• South India has tropical climate which is suitable for higher sucrose content giving higher yield per unit area as compared to north India.
• Khatauli’s Triveni Sugar Mill is the largest in Asia in terms of scale of production and storage capacity.

Issues with the Sugarcane Industry

• Sugarcane has to compete with several other food and cash crops like cotton, oil seeds, rice, etc. This affects the supply of sugarcane to the mills and the production of sugar also varies from year to year causing fluctuations in prices leading to losses in times of excess production due to low prices.
• India’s yield per hectare is extremely low as compared to some of the major sugarcane producing countries of the world. For example, India’s yield is only 64.5 tonnes/hectare as compared to 90 tonnes in Java and 121 tonnes in Hawaii.
• Sugar production is a seasonal industry with a short crushing season varying normally from 4 to 7 months in a year. It causes financial loss and seasonal employment for workers and lack of full utilization of sugar mills.
• The average rate of recovery of sugar from sugarcane in India is less than ten per cent which is quite low as compared to other major sugar producing countries.
• High cost of sugarcane, inefficient technology, uneconomic process of production and heavy excise duty result in high cost of manufacturing.

Highlights of what the minister said about Sugar industry

• Sugar producing is a loss-making enterprise today. If the economic cycle goes in reverse gear, then farmers will not get any money for their produce, banks will crash and sugar factories will shut. Hence, the focus should be converting sugarcane juice to ethanol.
• The government is ready to buy ethanol, which is a green fuel. In this way, all petrol vehicles will run on ethanol in the future and the farmer, too, will be able to make money.
• If farmers converted to producing ethanol, then the imports would greatly reduce from the ₹12 lakh crore to an estimated ₹5 lakh crore.
• India had produced 310 lakh tonnes of sugar as against its requirement of only 240 lakh tonnes. – Producing 70 lakh tonnes in excess is not good as the scenario in the international market is no better (The price in Brazil was Rs. 22 per Kg compared to India that managed to keep the price at 31 Rs.)
• As the Central government has already given permission for ethanol pumps, all sugar factories in Maharashtra must start an ethanol pump in their premise.

What is Ethanol fuel?

• Ethanol fuel is ethyl alcohol, the same type of alcohol found in alcoholic beverages, used as fuel.
• It is most often used as a motor fuel, mainly as a biofuel additive for gasoline.
• Ethanol is commonly made from biomass such as corn or sugarcane.
• Bioethanol is a form of renewable energy that can be produced from agricultural feedstocks.
• It can be made from very common crops such as hemp, sugarcane, potato, cassava and corn.
• There has been considerable debate about how useful bioethanol is in replacing gasoline.
• Concerns about its production and use relate to increased food prices due to the large amount of arable land required for crops, as well as the energy and pollution balance of the whole cycle of ethanol production, especially from corn.

Ethanol Blended Petrol Programme (EBP)

• Ethanol Blended Petrol (EBP) programme was launched in 2003- and this initiative is pursued aggressively in the last 4 to 5 years to reduce import dependence of crude oil as well as mitigate environmental pollution.
• The Ethanol Blending Programme (EBP) seeks to achieve blending of Ethanol with motor sprit with a view to reducing pollution, conserve foreign exchange and increase value addition in the sugar industry enabling them to clear cane price arrears of farmers.
• Although the Government of India decided to launch EBP programme in 2003 for supply of 5% ethanol blended Petrol, it later scaled up blending targets from 5% to 10% under the Ethanol Blending Programme (EBP).
• The Government of India has also advanced the target for 20% ethanol blending in petrol (also called E20) to 2025 from 2030.
• Currently, 8.5% of ethanol is blended with petrol in India.

Roadmap for Ethanol Blending in India by 2025

• The central government has released an expert committee report on the Roadmap for Ethanol Blending in India by 2025 that proposes a gradual rollout of ethanol-blended fuel to achieve E10 fuel supply by April 2022 and phased rollout of E20 from April 2023 to April 2025.
• The Ministry of Petroleum & Natural Gas (MoP&NG) had instituted an Expert Group to study the issues such as pricing of ethanol, matching pace of the automobile industry to manufacture vehicles with new engines with the supply of ethanol, pricing of such vehicles, fuel efficiency of different engines etc.

Advantages of Ethanol Blending

• Use of ethanol-blended petrol decreases emissions such as carbon monoxide (CO), hydrocarbons (HC) and nitrogen oxides (NOx).
• The unregulated carbonyl emissions, such as acetaldehyde emission were, however, higher with E10 and E20 compared to normal petrol. However, these emissions were relatively lower.
• Increased use of ethanol can help reduce the oil import bill. India’s net import cost stands at USD 551 billion in 2020-21. The E20 program can save the country USD 4 billion (Rs 30,000 crore) per annum.
• The oil companies procure ethanol from farmers that benefits the sugarcane farmers.
• Further, the government plans to encourage use of water-saving crops, such as maize, to produce ethanol, and production of ethanol from non-food feedstock.

-Source: The Hindu