The government has given in principle approval to 422 ethanol projects, which may add annual production capacity by 1,675 crore litres. These projects, which are likely to bring a combined investment Rs 41,000 crore, would get soft loan from banks on easier terms. This would benefit farmers and fast track the programme of ethanol blending with petrol to reduce dependency on oil imports.
The government has set a target of achieving 8.5% ethanol blending this year, followed by 10% next year and 20% by 2025.
“These proposals are from 22 states. So, we will have distributed production of ethanol benefiting farmers across the country. In next three years itself, we expect to almost double our existing production capacity of 684 crore litres through these new projects,” said a senior food ministry official.
He said that the surge in ethanol-based projects is due to the government’s recent announcement to extend subsidised credit facilities to grain-based distilleries also. The government provides interest subvention of 6% or half the interest rate charged by the banks for five years, including a one-year moratorium.
“Out of 422 proposals, 201 proposals were from grain-based distilleries while 141 were from distilleries using both grain and molasses as feed stock. We expect more such projects to come up,” he said.
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