Integrated Ethanol Management System
About IEMS
The Government of India (GoI) and the Oil Marketing Companies (OMCs) are aggressively promoting blending of ethanol in Motor Spirit (petrol) with a view to reduce the carbon footprint and conserve foreign exchange by reducing import of crude oil. GoI has set a target of 20% blending by the year 2025, of Ethanol but there are various complexities involved in Ethanol Blending, such as Non-Uniform Distribution of Ethanol Plants, Dynamic Business Scenarios and added complexity due to target growth towards 20% blending.
In order to navigate through these complexities and to achieve the blending targets we require an efficient and centralized solution. This brings into picture the IEMS portal. IEMS will simplify the complexities involved and help streamline the current process through digitization. Some of the highlight features of IEMS shall be as follows:
- Single Window for all Stakeholders:All the concerned stakeholders including MoPNG, OMCs, Suppliers and Supplier Associations will be onboarded on the platform.
- Unified Data Source for Ethanol:IEMS will collate all the data relevant to ethanol blending on one single platform. platform.
- End to End Value Chain Visibility:The platform will provide end to end visibility of the entire ethanol value chain right from demand management to movement of ethanol TLs.
- Reduce Manual Efforts & Intervention:The solution will automate manual processes and thereby help improve the efficiency of the business users.
- Better Decision Making:Business users will be able to take better decisions based on the information available to them.
Benefits and Process Flow
About Ethanol
What is Ethanol?
Ethanol also known as ethyl alcohol, is a chemical compound with the molecular formula C2H5OH. It is a type of alcohol. Ethanol is a colorless flammable liquid with characteristic odour. Denatured Anhydrous Ethanol from Indigenous manufacturers meeting Industry Specifications of Denatured Anhydrous Ethanol based on IS 15464:2022 and revision from BIS from time to time, requirements are stipulated. Its applications fall in a wide range of spectra like solvent in pharma & chemical industry, key component in beverages, potential Biofuel, disinfectant and used as preservative. Importantly, implementation of Ethanol as fuel ingredient would impart substantial savings on import cost to our country.
How is it Produced?
Ethanol can be produced through the fermentation of sugars by east or through the chemical synthesis. In alcoholic beverages it is primarily produced through fermentation of sugars in grains, fruits or other sources. At current scenario, the Ethanol demand is by sugar industry in our country. They use various types of molasses, damaged food grains for Ethanol production. Over & above, Biorefineries are entrusted to utilise agricultural biomass to produce Ethanol. BPCL is established a biggest Biorefinery at Bargarh, dedicatedly employing the agricultural wastes, converting into 2G Ethanol.
Types of Ethanol
Ethanol is explored as potential biofuel which can be produced from biomass. Mostly, Ethanol is produced from fermentation of sugars, damaged food grains or other sources. Based on the feedstock used for its production, Ethanol is classified as 1G, 2G & 3G etc.
1G Ethanol is produced from edible biomass like sugar cane or food grains. Whereas 2G Ethanol is produced from non-edible biomass like molasses, damaged food grains, agriculture residues, forestry residues etc. Recent research interest is that 3G ethanol which is produced from industrial wastes/municipal waste etc.
BIOFUELS
| GENERATION | CHARACTERISTICS | REMARKS |
|---|---|---|
| FIRST | Produced from food crops like maize, corn, sugar cane, rapeseed, palm, and soybean into ethanol and biodiesel, using a similar process to that used in beer and winemaking. | Impose significant costs on food security by demanding a share of staple crops, traditionally used solely for food and feed. Resulting in a conflict between fuel and food security. At the same time, lift the price of staple crops |
| SECOND | Produced from non-food crops and organic agricultural waste, which contain cellulose. | Grasses like switchgrass, non-edible oil seeds like Jatropha, castor seed can be transformed into biofuels. |
| THIRD | Derived from algae. Also known as green hydrocarbons | The list of fuels that can be derived from algae includes Bio-diesel, Ethanol, and Jet-fuel. |
| FOURTH | Produce sustainable energy as well as capture and store CO2 by converting biomass materials, which have absorbed CO2 while growing, into fuel. | At all stages of production, the CO2 is captured using various processes. Rather than simply being carbon neutral, the fourth generation biofuel production is carbon negative, since it ‘locks’ away more carbon than it produces and also lowers CO2 emissions by substituting fossil fuels. |
Ethanol as Fuel
Ethanol is a renewable & sustainable biofuel. Government has mandated the utilization of Biofuels like Ethanol and Biodiesel to blend with our conventional fuels. Ethanol is a natural octane booster for Motor Gasoline and beneficial for the cleaner environment as it is regarded as benign to environmental pollution. Ethanol utilisation as fuel not only imparts savings on import cost, but also creates rural employment. Fuel grade Ethanol is anhydrous and denatured. Denaturant is a chemical substance added to fuel grade Ethanol to make it unfit for human consumption. Since it is feasible to fit as fuel and compatible to mix with motor gasoline, 5% Ethanol was permitted to blend with Motor Gasoline initially. Later, this gradually increased to 10% and now currently blending 12% of Ethanol with Motor Gasoline. As per the Ethanol Roadmap, this Ethanol blending percentage shall be reached to 25% by 2030. Fuel grade Ethanol is a pure chemical without any significant impurities. In order to maintain superior quality, series of stringent QC checks are performed as per the Industry Quality Guidelines during the receipt of Ethanol tank lorry, storage and dispatch stages.
Currently, oil companies are procuring ethanol from vendors of sugar/Grain mills. It is received, stored, and blended at our storage locations. Denatured Anhydrous Ethanol from Indigenous manufacturers meeting Industry Specifications of Denatured Anhydrous Ethanol based on IS 15464:2022 and revision from BIS from time to time, are to be followed at the production site. During receipt of the consignment at our locations, robust quality checks are performed and received the product subject to meeting the specification requirements.
The utmost care is taken through various QC checks carried out during the blending of Ethanol with Motor Gasoline. There certainly 3 kinds of blending procedures are available as per the operational feasibility. 1. In tank blending, 2. Online blending and 3. Splash/Sequential blending.
Benefits of using Ethanol as Fuel
Environmental Advantages
Ethanol, a renewable fuel blended into Indian petrol for over 9 years, reduces vehicle emissions like CO, HC, and NOx by 20%, improving air quality.
Economic Empowerment
Ethanol benefits India's economy by saving billions on petroleum imports, boosting energy independence, and creating jobs in the agricultural sector
Sustainable Fuel
Ethanol reduces carbon emissions thanks to advanced and eco-friendly production methods that also cut other harmful pollutants
Driving Energy Independence
Ethanol replaced 600 Mn barrels of crude oil in 2022, aligning with India's goal to cut imports and save billions, highlighting the need for better adoption
Balancing Food and Fuel
Ethanol biorefineries yield distillers' grains, supporting fuel & food supply chains with processed bushels dedicated to animal feed, promoting agriculture
Ethanol Growth Story
The Government under the leadership of Hon’ble Prime Minister Shri Narendra Modi, in line with its Energy security, climate change and rural economy enhancement goals initiated multipronged reforms to boost Ethanol usage in the country.
2014-2018
Re-introduced administered price mechanism
for ethanol to be procured under the EBP Program
Dec 2014
Opened alternative route for ethanol 2G and petrochemical production
directed Oil PSEs to set up bio-refineries
Dec 2014
Tendering processes simplified
Multiple EOI, transportation slabs and rates
ESY 15-16
IDR Act Amendment on 14th May 2016
to clarify on the roles of Central and State Government for continuous supply of ethanol to be blended with petrol under EBP Program
May 2016
Regular interaction with states
and all other stakeholders to address issues regarding the EBP Program - this is an ongoing process
ESY 16-17
National Policy on Biofuels
Notified forward looking and updated National Policy on Biofuels – 2018 involving all stakeholders
Jun 2018
Interest Subvention Scheme
to improve and increase ethanol production capacity in the Country. Government to provide interest (interest subvention), for a period of 5 years. GST on ethanol lowered from 18% to 5%
July 2018
Allowed conversion of B heavy molasses, sugarcane juice and damaged food grains to ethanol
Fixed differentiated ex-mill ethanol price and sourcing of raw material utilised for ethanol production given priority. Marked beginning of differentiated ethanol pricing, based on raw material utilised for ethanol production
ESY 18-19
2019-2021
Extension of EBP Programme to the whole of India
except the Island UTs of Andaman Nicobar and Lakshadweep
Apr 2019
New sources sugar & sugar syrup introduced
for ethanol production at fixed remunerative price
Sep 2019
Ethanol Procurement Policy
Published “Ethanol Procurement Policy on a long-term basis under EBP Program”
Oct 2019
One time registration of ethanol suppliers
for long term, including giving them visibility of ethanol demand for 5 years
Aug 2020
Approval of National Biofuel Coordination Committee
Further ease of tender conditions by Oil Marketing Companies (OMCs) alongwith Approval of National Biofuel Coordination Committee (NBCC) to utilise surplus stock of rice lying with Food Corporation of India (FCI) to be released to the distillers for ethanol production.
Oct 2020
Approval of NBCC
to utilise maize for ethanol production
Nov 2020
Interest subvention scheme
Included grain-based distilleries under interest subvention scheme for capacity expansion
Jan 2021
Ethanol & Ethanol-Blended Petrol (EBMS)
Introduced multimodal transportation of Ethanol & Ethanol-Blended Petrol (EBMS) to ethanol deficit states
Feb 2021
2022
Roadmap for ethanol blending
in India 2020-25
Jun 2021
Long Term Offtake Agreement
Signed with 131 project proponents to set up dedicated ethanol plants
Jan 2022
Amendment
to National Policy on Biofuels 2018
Jun 2022
Maize based ethanol
Separate price for maize based ethanol
Oct 2022
Increase in ethanol storage capacity
Oil Marketing Companies (OMCs) increased their ethanol storage capacity from 5.39 Cr Lt in November 2017 to 34.4 Cr Lt till November 2022, thereby providing ethanol storage cover of over 20 days at their depots. Amount spent by OMCs is approximately 750 crores – this is an ongoing process
Nov 2022
Ethanol Blended Petrol Programme
During 2001, pilot projects on Ethanol Blended Petrol commenced at 3 locations: Miraj, Manmad (Maharashtra), and Aonla/Bareilly in Uttar Pradesh. The Government of India decided to launch the Ethanol Blended Petrol (EBP) Programme in January 2003, aiming to supply 5% ethanol blended Petrol. Subsequently, the Ethanol Blended Petrol programme was introduced in January 2003 across 9 States: Maharashtra, Gujarat, Goa, Uttar Pradesh, Haryana, Punjab, Karnataka, Andhra Pradesh, Tamil Nadu, and 4 Union Territories.
The Ministry of Petroleum & Natural Gas (Mopan), through a notification dated 20th September 2006, directed Oil Marketing Companies (OMCs) to sell 5% Ethanol Blended Petrol, subject to commercial viability and in line with Bureau of Indian Standards specifications. This was applicable in 20 notified States and 4 UTs, effective from 1st November 2006. An additional 10 States were included: Delhi, Himachal Pradesh, Madhya Pradesh, Chandigarh, Kerala, Rajasthan, West Bengal, Odisha, Bihar, and Jharkhand. However, the North-Eastern States, J&K, Andaman & Nicobar Islands, and Lakshadweep Islands were not covered under the programme.
This initiative expanded nationwide, except for the Union Territories of Andaman Nicobar and Lakshadweep islands, from 01st April 2019. Oil Marketing Companies (OMCs) began selling petrol blended with up to 10% ethanol.
In the ethanol supply year 2018-19, approximately 189 crore liters of ethanol were supplied by sugar mills and grain-based distilleries to OMCs, achieving the 5% blending target. In the ethanol supply year 2019-20, efforts were directed towards supplying 190-200 crore liters of ethanol for blending with petrol to achieve 5.6% blending. For the current ethanol supply year (ESY) 2020-21 (December to November), around 325 crore liters of ethanol need to be supplied to OMCs to achieve the 8.5% blending target. As of 26th April 2021, OMCs have allocated about 349 crore liters of ethanol to sugar mills and distilleries. Furthermore, in the upcoming ESY 2021-22, the supply of over 400 crore liters of ethanol to OMCs is anticipated to achieve 10% blending.
The Government has already achieved a target of 10% blending in June 2022, much ahead of the target of November 2022 and a 20% blending target by 2030.
January 2003
E5 Supply Launch
10% Ethanol
sold by OMCs from 2019
400 Cr Lt
ethanol to achieve E10 in 2021-22
20% Blending Target
by 2025 set by GoI
Vision
Vision of EBP
The Ethanol Blended Petrol (EBP) Program, through its implementation, tries to showcase the vision of new India:
- To make India self-reliant
- To shift focus from depleting conventional sources to abundant non-conventional sources of energy.
- To achieve the Net Zero Carbon emission goal by 2070
- To maintain Indian foreign exchange reserves
E20 and Way forward
Current Scenario of E20
With the implementation of Ethanol Blended Petrol Program (EBP), ethanol blending has increased at a significantly higher pace. From 38 Crore liters in 2013-14(ESY) to 433.6 crore liters in 2021-22(ESY), the blending composition has increased from 1.53% to 10% which shows the growth of Ethanol industry. This has led to a major boost to farmers’ income and the suppliers of ethanol who had their remunerative prices double in 2021-22 as compared to 2014. As the ethanol industry has grown, the number of distillation capacities have grown as well by more than 2.5 times, while the number of distilleries increased by 66% in these 8 years. To store the ethanol produced, storage capacity plays an important role in Ethanol supply chain, which also has increased by more than 6 times from 2017 to 2022. The production of ethanol at the start of EBP was mostly from Heavy Molasses, but as the time passed, other feedstocks like Maize, Rice, sugar syrup, etc. have also taken the load of producing ethanol. The decision to allow diversion of sugarcane & grain-based feedstocks for ethanol production since 2018-19 enabled reliable supply of feedstocks and price stability for farmers.
Future Outlook
Ethanol Industry is expected to grow by 500%. By 2025, at 20% blending level, ethanol demand will increase to 1016 crore litres. Therefore, the worth of the ethanol industry will jump by over 500% from around 9,000 crores to over 50,000 crore.
Ethanol distillation capacity to double to 1,500 crore litres annually:
- A financial assistance scheme was introduced by Department of Food and Public Distribution during 2018-2022 to increase ethanol production capacity.
- Long term offtake agreement signed to establish 431 crore litres per annum of dedicated ethanol capacity.
- Estimated 165 LMT of surplus grain to be utilized annually from 2025 to produce ethanol which would result in estimated 42,000 crore payment to farmers.
- Launch of new vehicles compatible to run on E20 fuel from 2023 and flex fuel vehicles from 2024. This will attract new investment and create employment opportunities.