Direct sale of ethanol to boost demand

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New Delhi: The central government’s decision to allow the direct sale of ethanol as fuel to compatible automobiles will boost ethanol demand, according to India Ratings and Research (Ind-Ra).

The move will help the sugar industry as it will be difficult for India to extend export subsidies after 2023 as per the decision taken at the WTO’s Nairobi Ministerial meeting held in December 2015.

As per the report for the year 2020-21, the contracts have been signed to supply 3 billion litres of ethanol and till the first week of March 0.8 billion litres have been supplied. This indicates the blending rate at around 7%, though states such as UP, Maharashtra, Karnataka, Uttarakhand and Bihar achieved a higher blending rate of up to 10 per cent.

Of the total ethanol supplied, 78% of ethanol is made from cane juice or B-heavy molasses, said the report.

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