The increased demand for ethanol for blending with petrol and diesel to meet government targets has pushed industry players to boost production. Ethanol is an organic compound that is produced from biomass. The reason why ethanol is blended with petrol is that it reduces vehicular emissions. To capitalize on the supply-demand deficit scenario, ethanol maker BCL Industries has said that it has plans to increase the total group distillery capacity to 850 kilo litre per day (KLPD) over the next two years from the current 600 KLPD.
"With multi-feedstock and modern plants located at Punjab and West Bengal, BCL has an installed capacity of 600 kiloliters per day (KLPD) with expansion plans up to 850 KLPD," it said in a filing on BSE.
Its boiler fired on paddy straw qualifies for the Punjab government scheme in which SGST on the capex of the boiler will be refunded.
Ethanol produced by dedicated ethanol plants is sold to oil marketing companies (OMCs) for blending with petrol as per the Centre's Blended Petrol (EBP) Programme.
The Centre government has already increased ethanol prices twice in recent months to keep up with the momentum to achieve the 12 per cent blending target in the current ethanol year and 20 per cent by 2025.
At present, 10 per cent ethanol is blended into petrol. Ethanol is an organic compound that is produced from biomass. The reason why ethanol is blended with petrol is because of its higher octane number than gasoline, which contributes to improving the octane number of petrol. Ethanol has an insignificant amount of water in it.
Last month, Union Minister of Road Transport and Highways Nitin Gadkari launched a 100 per cent ethanol-fueled variant of Toyota's Innova car. He said that ethanol, being an indigenous, eco-friendly, and renewable fuel, holds promising prospects for India.
"The ethanol industry is a boon for farmers. The demand for ethanol in the country will grow. It will change the agriculture economy of India," he had said.