Ethanol industry growth in Telangana affected by curbs on inter-state movement

Hyderabad: Restrictions on inter-state movement of ethanol in Telangana have affected the growth of ethanol industry in the state. The government has been receiving big investment proposals to set up ethanol industries in the wake of the Centre’s policy to achieve 20 per cent ethanol-petrol blending by 2025.

At present, petrol is being sold with 10 per cent ethanol which is E10 while the target is to reach E20 by 2025.

Prime Minister Narendra Modi recently advanced the country’s target of 20 per cent ethanol blending in petrol by five years to 2025, from 2030.

The Centre is encouraging ethanol-petrol blending to reduce its fuel import bill, to help farmers earn extra income and ethanol being less polluting than fuels.

Ethanol blending will also help solve the problem of agricultural waste as well as sugar prices plummeting due to excess production, therefore providing security to sugarcane farmers.

In the previous fiscal, 87 per cent of the ethanol used for India’s ethanol blending programme was produced using sugar.

Official sources said the restrictions on inter-state movement of ethanol due to non-implementation of the amended provisions of Industries (Development & Regulation) Act, 1951 by all the states is the other big challenge.

Only 14 states figure in the list of those that have implemented the amended provisions.

Telangana is among the states such as Delhi, Uttar Pradesh, Rajasthan, West Bengal, Odisha and Kerala, which are yet to implement the amended provisions.

Sources said the TS government has received proposals to set up four ethanol units with a total investment of RS 4,000 crore. These include public sector oil companies HPCL, BPCL and IOC besides a private firm Dhatri.

The state government has decided to allot land for these firms in Nalgonda and Siddipet districts.

With paddy, wheat and maize production reaching record levels in Telangana, ethanol industry sees huge potential for this industry in Telangana. Ethanol can be produced from the agriculture waste of these crops.

Sugarcane production is significantly high in undivided Nizamabad district.

The issue of restrictions on inter-state movement of ethanol came up for discussion in the recent cabinet sub-committee meeting chaired by industries minister KT Rama Rao. He promised to resolve this issue fast to tap the huge potential for ethanol industry in Telangana.

The Centre had last year set a target of 10 per cent ethanol blending in petrol by 2022 and 10 per cent ethanol blending in diesel by 2030. In 2020-21, oil marketing companies (OMCs) raised the proportion of ethanol blended in petrol to 8.5 per cent from 5 per cent the previous year. The procurement of ethanol by OMCs almost doubled to 332 crore litres from 173 litres the previous fiscal.