The government is reportedly working on a policy framework to introduce ethanol as a major cooking fuel, and the move is aimed at helping it gain acceptance alongside LPG in homes.
According to a report in The Economic Times citing industry executives aware of the development, the proposed framework is expected to cover subsidies and supply chain creation, while industry bodies representing fuel suppliers are also holding parallel consultations with the government.
One executive said the policy could be ready by September. This push comes at a time when India has excess ethanol capacity and is looking for ways to reduce its dependence on LPG and contain its rising fuel bill, the report said.
Industry executives said the government may consider a subsidy scheme for ethanol cooking that could either be capital-driven, through a one-off investment subsidy, or involve an ongoing financial commitment. Ethanol, the green fuel produced by the fermentation of sugars and grains, has already been tested as a cleaner alternative to household fuel.
There have been previous reports that ethanol-based cookstoves were being tested at the request of the government. Oil marketing companies are also said to be conducting research and development on ethanol-based stoves and exploring potential partnerships or acquisitions involving ethanol-available cooking technologies.
To launch the scheme, oil marketing companies may be asked to set up automated ethanol dispensing machines, or ATMs, where users can buy ethanol in bottles for stoves, executives said. These ATMs can be placed at retail fuel outlets of oil companies.
The country’s ethanol production capacity has exceeded 20 billion liters annually, and another 4 billion liters is scheduled to be produced this fiscal year, according to a CareEdge ratings report released in May. Of this, about 11 billion liters per year are used for the government’s E20 blending programme, while another 3 billion to 3.5 billion liters are consumed by alcohol makers, pharmaceutical companies and chemical manufacturers, leaving almost 7 billion liters of unused capacity.
With this excess capacity, India may also consider exporting ethanol to neighboring countries, including Nepal, Bangladesh and Indonesia, which have targets to blend 10 per cent ethanol but lack sufficient raw materials and distillation capacity.
