Editorial: Building on the bio-fuel buzz

Union Road Transport and Highways Minister Nitin Gadkari’s plans to replace petrol with ethanol within the next two to three years is gaining momentum as he has got the assurances of some of India’s leading automobile manufacturers, who have committed to introducing ethanol-powered models in the market. Gadkari highlighted that the Ministry will soon issue an advisory for automobile manufacturers to use flex engines in their two, three and four-wheelers. Flexible fuel vehicles (FFV) essentially have an internal combustion engine (ICE) and are capable of operating on petrol and any blend of petrol and ethanol up to 83%. The Minister had previously emphasised that ethanol is a cost-effective and pollution-free substitute to conventional fuels and that FFV engines will be made mandatory in the days to come.

There is a logical argument that supports Gadkari’s push for going green. Reliance on ethanol saves precious outflows in foreign exchange, thanks to the gradual but imminent decoupling from oil-producing nations of the world. But it is also a major incentive for farmers in the country, as ethanol is made from sugarcane. The resultant economic benefit of shifting to ethanol speaks for itself – one litre of bio-ethanol costs Rs 63.45 as against Rs 110 for a litre of petrol. Given the constant surge in crude oil prices, this transition might provide a much-needed respite for the citizens reeling from its multi-pronged impact. India could find inspiration in the likes of Brazil as well, the second-largest producer of ethanol globally after the US. Brazil has developed flex engines that can run on 25 per cent ethanol and 75 per cent gasoline.

According to the report of the Expert Committee on Roadmap for Ethanol Blending in India by 2025, attaining the target of 20% ethanol blending (E20) is within reach. The study highlights the fact that India could save over Rs 30,000 crore of foreign exchange per year, ensure wide-scale energy security for its people, lay the groundwork for lower carbon emissions, better air quality and self-reliance through this transition. On the agricultural front, damaged food grains can be reused which could precipitate an increase in farmers’ incomes, supplement employment generation, and enable greater investment opportunities for the country.

Envisioning a blueprint to transform the entire nation’s fuel requirements is just the first step. There are challenges that need to be considered before we can embark on this road to sustainability. On the production front, one needs to consider the availability of sufficient feedstock on a sustainable basis such as sugarcane, food grains, etc. The current regulations in India only permit the production of ethanol from sugarcane, sugar, molasses, maize and damaged food grains that are unfit for human consumption. One must also factor in the vagaries of weather and the issues resulting thereby i.e. floods and droughts affecting the crop; as well as regions where ethanol can be produced.

Encouragingly, the Centre is working on a war footing to build the infrastructure for this disruptive transformation. Policy clearances have been granted for the setting up of ethanol pumps, which are now present in many parts of the country, and a 136% increase in their numbers has been recorded recently. State-run oil marketing companies have also been ordered to offer bio-fuels at the same facilities where petrol and diesel are being retailed. As an add-on benefit, the rate of GST on ethanol meant for blending purposes has been revised to 5 per cent from the previous 18 per cent. Given the right push, India could have its cake, and eat it too, with this move towards bio-fuel led sustainability.