India’s Ambitious Ethanol Plan & Food Security

In News

• In June 2021, the Prime Minister accelerated the nation’s ethanol goal by 5 years.
  • The policy seeks to double production and to have gasoline 20% blended with the spirit by 2025. 
  • To help meet the target, the government is offering financial assistance to biofuel producers and faster environmental clearances.

Need for Such Plan

• Energy Security
  • India is the third-largest consumer of energy in the world after China and the US.
  • Ethanol will promote AtmaNirbhar Bharat Abhiyan by ensuring energy self-dependency to some extent.
• Reduction in import dependency
  • India is dependent on imports for about 82.1% of its crude oil requirement and to the extent of about 44.4% in the case of natural gas.
  • EBP will reduce oil import bills and can save precious USD 4 billion (Rs. 300 Billion) per year.
• Entrepreneurial Opportunity
  • India is expected to need 10 billion litres of ethanol annually to meet the 20% blending target in 2030 if petrol consumption continues to grow at the current pace.
  • At present, the capacity stands at 1.55 billion litres a year.
• Support for the agricultural sector 
  • It will help the sugar mill owner to pay farmers their pending FRP for sugarcane.
  • It will also mitigate the problem of low sugar prices in the international market.
• Additional income to farmers
  • It is in line with the vision of the Prime Minister regarding Doubling the Farmer’s Income
• Environmental friendly fuel.
  • It will decrease emissions of CO, Hydrocarbons, NOx, etc as it burns more smoothly due to the presence of Oxygen in the molecule itself.
• SDG targets
  • Relatively low Emissions will help achieve SDG targets and mitigate climate change.

Criticism of the E20 plan

• Threat to Food Security
  • Ethanol derived from rice, corn and sugar could undermine food security in the world’s second-most populous country.
  • India still ranks 94th on the Global Hunger Index 2020 comprising 107 nations.
  • The Food and Agriculture Organization estimates that about 209 million Indians, or about 15% of its population, were undernourished between 2018 and 2020. 
    • The coronavirus pandemic is also pushing more people into poverty, dealing a blow to decades of progress.
• Water Crisis
  • The new ethanol policy should ensure that it doesn’t drive farmers toward water-intensive crops and create a water crisis in a country.
  • Rice and sugarcane, along with wheat, consume about 80% of India’s irrigation water.
  • There is a need to prioritise food production over crops for fuel due to following
    • Depleting groundwater resources, 
    • Arable land constraints, 
    • Erratic monsoons, and 
    • Dropping crop yields due to climate change.
  • A ton of corn can typically produce about 350 litres of ethanol, while a similar quantity of rice can yield about 450 litres of the spirit. 
    • For sugarcane, it’s about 70 litres.
• Competition between the distilleries and the public distribution system
  • As per some critics, the food grains meant for the impoverished are being sold to distilleries at prices cheaper than what states pay for their public distribution networks.
  • Many ethanol producers are getting rice at 2,000 rupees per 100 kilograms, 
    • which compares with an estimated 4,300 rupees FCI pays to stock up the grain.
  • It could have adverse consequences for the rural poor and expose them to an enhanced risk of hunger.
• Aversion among developed nations too
  • Many developed countries debate limiting policy support for grain-based biofuels.
  • Such steps are being taken amid reports of food-price increases and greenhouse gas emissions from deforestation
  • The USA is focussing on Electric Vehicles.
• Non-uniform availability of Blending Infrastructure
  • About 50% of total pump nozzles in India are supplying only E0 even today especially in the North East States.
  • High Logistics Cost is also a challenge for petrol pump operators.
• Challenges to Vehicle Manufactures and old Vehicle Owners
  • Rusting of the fuel tank was seen as ethanol sucks moisture from the atmosphere.
  • E20 compatible vehicles are expected to be costlier.

Way ahead and Conclusion

• Shift Focus from 1G to next-generation Biofuels
  • It will counter the most genuine fear of loss of food security.
  • Even, the 2018 National Policy on Biofuels prioritized 
    • grasses and algae; 
    • cellulosic material such as bagasse, farm and forestry residue; and, 
    • items like straw from rice, wheat and corn for ethanol production.

Courtesy: Science Direct

• Floor Price for Ethanol
  • To promote entrepreneurship and investment, predictability is required.
  • A floor price will help in that direction.
• Making Vehicle manufacturers future-ready
  • The industry and petrol pump should be made ready for next pushes like E85 and E100.
• India has a real opportunity here to become a global leader in sustainable biofuels policy if it chooses to refocus on ethanol made from wastes.
  • This would bring both strong climate and air quality benefits, since these wastes are currently often burned, contributing to smog.

Source: IE