Cabinet okays ethanol projects' funding

NEW DELHI: The Cabinet has approved a scheme to provide Rs 1969 crore as viability gap funding to second generation (2G) ethanol projects over the next six years.

Under the scheme, called the Pradhan Mantri JI-VAN Yojana, Rs 1800 crore has been allocated for supporting 12 commercial projects, Rs 150 crore for 10 demonstration projects and the balance Rs 9.50 crore for the administrative expense by the Centre for High Technology (CHT), an Oil Ministry arm that would oversee the scheme.

“The scheme focuses to incentivise 2G Ethanol sector and support this nascent industry by creating a suitable ecosystem for setting up commercial projects and increasing research & development in this area,” an official statement said.

The ethanol produced by the scheme beneficiaries will be mandatorily supplied to Oil Marketing Companies (OMCs) such as Indian Oil, Bharat Petroleum and Hindustan Petroleum to further enhance the blending percentage under the ethanol blending programme, as per the statement.

The government is aiming to achieve 10% blending percentage of ethanol in petrol by 2022. Despite efforts of the Government such as higher ethanol prices and simplification of ethanol purchase system, the highest ever ethanol procurement stands around 150 crore litres during ethanol supply year 2017-18 which is sufficient for around 4.22% blending on pan India basis, the statement said.

Therefore, an alternate route of 2G ethanol from biomass and other wastes is being explored by the government to bridge the supply gap for ethanol blending programme.


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