India’s Ethanol Blended Petrol (EBP) Programme is aimed at achieving multiple outcomes such as; addressing environmental concerns, reducing import dependency and providing a boost to the agriculture sector. In the month of September 2021, oil companies had received a good response for the first Expression of Interest (EOI) for signing long-term agreement with upcoming dedicated ethanol plants for supply of ethanol with 197 bidders participating in the same.
On 22nd November 2021, OMCs allocated quantities of supply to the Indian distillers for Ethanol Supply Year 2021-22. A total allocation of 316 Cr litres has been announced which is significantly higher than then the total supplies of 272 Cr litres by Indian distillers till 31st October 2021 against 20-21 tender. Total requirement of ethanol for the current ESY 21-22 is 459 Cr ltr. It is evident that further quantities will be covered in subsequent tenders.
An important aspect of this year’s tender has been that prior to the tender, OMCs have entered long term contracts with grain distilleries based in deficit states and supplies from those distilleries have been given first priority. As per the feedback received from millers on the tender and allocations, there is fear that that this step may hamper the expansion prospects of sugarcane based distilleries in surplus states like Maharashtra, Karnataka and Uttar Pradesh.