Government is future-proofing its energy demands with biofuel growth: Binny New Re Energy Limited

Binny New Re Energy Limited (BNREL), a subsidiary unit of Binny Limited, is setting up a 195 KLPD grain-based ethanol manufacturing plant in Thoothukudi district of Tamil Nadu under the National Biofuel Policy 2018. The plant is expected to commence in early 2025.

In an exclusive interview with ChiniMandi, Mohammed Abdul Salam & Sultan Abbas, both Executive Directors & Promoters for Binny New Re Energy Limited, said that companies can take advantage of the green economy benefits such as carbon credits, green bond market etc. The Government is positively future-proofing its energy demands with the support of private sector involvement & investments.

Q. You are shortly opening your first grain-based ethanol plant. Previously you were supplying molasses for portable alcohol, which you will exit completely. Can you tell us why the company chose to make this business transition?

A. Our Chairman, Mr. Nandagopal is a pioneer in the Renewable Energy & Alcohol Business in South India having had a large-scale collaboration with Mohan Meakins Ltd, who were most famous for Old Monk. He was one of the leading distillers and brewers in the state.

With the ambitious renewable energy plans that India has in line with global Net-Zero targets, our chairman envisioned a successful transition into biofuels.

We are looking for an exit from potable alcohol as this policy aligns with our long-term commitment to the renewable energy space. Having had experience working abroad and majoring in Engineering, Planning, Economics & Finance degrees abroad, I strongly believe in the true socio-economic benefits provided by this policy and impacts multiple stakeholders in our economy positively.

Q. What is your understanding of the biofuel space? Is there scope for growth?

A. Biofuel is an alternative fuel that goes hand in hand with regular fuel, acting almost as a like-to-like replacement except with a carbon-neutral life cycle. With the rise and development of flex-fuel engines that the likes of Brazil use, we can surely see a strong rise in ethanol blends in fuel for the future and ensure the sustained reduction of carbon emissions & true socio-economic benefit to the country & economy.

The national biofuel policy is a well-knitted scheme to support entrepreneurs and farmers. The scope of growth is good as the policy complies with global targets and the policy lets India use its agricultural strengths.

With the announcement of the Global Biofuels Alliance at the recently concluded G20 summit, we envision a strong future for this industry in terms of support & growth. We are comfortably located with a central policy as a true example of public-private partnership. The CAGR of this business is good with projected rising fuel demands & with ethanol being a global commodity, neighbouring countries have also shown interest in importing ethanol from India showcasing an export potential in the future as well.

The biofuel transition is a globally accepted mandate. India is a bigger market altogether and with the government push and policy in the right direction, it will usher greater growth for the entire sector. In terms of our economy, there is a forex impact while simultaneously boosting the agrarian economy in the long run. In addition to this, we as an Industry can take advantage of the green economy benefits such as carbon credits, green bond market. The Government is positively future-proofing its energy demands with the support of private sector involvement & investments.

Q. You are coming up with one plant now, what are the future plans?

A. Our company looks to tap into our historic and strategic interests to promote ethanol manufacturing & blending in Tamil Nadu. We are planning to set up a 195 KLPD plant in Tuticorin, Tamil Nadu with potential expansion to 900 KLPD and beyond in strategic points of Tamil Nadu, Puducherry and Odisha. Other verticals of renewable energy such as solar, wind & green hydrogen are also in our future plans for the company.

Q. What are the issues that you are facing?

A. There are several issues that we are facing in the state. The Tamil Nadu state ethanol policy was announced only in 2023. There is still not much clarity regarding the policy due to which there are delays in local clearances. The State is still in deficit in ethanol production and we are not able to fulfil the total requirement of about 3000 KLPD needed to achieve E20 blending. Also, there are strategic issues with regards to availability of rice as a feedstock, and the promotion of maize is being taken up by the government on a large scale. We are currently in talks with the Sugar department and the Indian Institute of Maize Research to collaborate with our company & promote maize cultivation, yield & productivity in and around our command area in South India.

Q. What is your request to the Government both at the state and national level?

A. We want an extension of the deadline for early applicants who weren’t supported by their state government. Currently, the Interest Subvention Subsidy for early window applicants ended on 30/9/23. We request the Department of Food and Public Distribution, Government of India, to consider the deficit situation in the southern states and extend this deadline to April 2024, along with other final window applicants. This is a game-changing national policy that would comprehensively achieve its aims when all states benefit from it.

We also request the government to conclude the signing of long-term off-take agreements between distilleries and OMCs, which would help distilleries reach financial closure and help increase production quickly.

There should be comfort and support given to distilleries regarding state-level approvals and clearances. Issues like DDGS quality, when maize is used as a feedstock, must be addressed through appropriate research and data. Overall feedstock supply for the country should adequately be fortified with partnerships and collaboration to ensure that the Industry is resilient to any fluctuations in the demand supply of grain feedstock.


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