Oil marketing companies (OMCs) are set to procure over 335 crore litres of ethanol from upcoming biofuel manufacturing facilities across eight States and two Union Territories (UTs). The OMCs’ Ethanol Procurement Group (OEPG) has issued an expression of interest (EoI) to invite bidders to engage in long-term off-take agreements with upcoming dedicated ethanol plants (DEP) in various regions including Tamil Nadu, Kerala, Andhra Pradesh, Telangana, Gujarat, Rajasthan, Goa, Odisha, as well as Union Territories of Jammu and Kashmir and Ladakh. The purpose is to procure denatured anhydrous ethanol.
Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL), collectively, will procure 335.68 crore litres of ethanol annually from plants expected to commence commercial operations within two years from the date of signing the off-take agreement. The EoI follows a previous one issued on February 9, where OMCs aimed to procure 86.94 crore litres of ethanol from upcoming DEPs.
According to the latest EoI, OMCs will procure the highest amount, 87.22 crore litres annually, from Rajasthan, followed by Tamil Nadu (55.79 crore litres), Gujarat (48.99 crore litres), Andhra Pradesh (45.37 crore litres), Odisha (34.75 crore litres), Telangana (32.41 crore litres), Kerala (16.50 crore litres), Goa (7 crore litres), and collectively from J&K and Ladakh (9.65 crore litres).
The EoI document stipulates that a Tripartite Agreement (TPA) will be signed with the selected bidders entering into long-term off-take agreements who seek financing from banks or financial institutions. Project proponents, including PSUs other than IOCL, BPCL and HPCL, intending to set up or already in the process of setting up DEPs, may apply through this EoI. Even bidders who have established plants but haven’t commenced production prior to the publication date of this EoI are eligible to apply.
Through the ethanol blending program (EBP), the initiative aims to promote biofuels, increase farmer income, and reduce the crude oil import bill, which exceeded $157 billion in FY23. OMCs are offering prices of ₹56.28 per litre for ethanol made from C-Heavy Molasses, ₹71.86 a litre for maize, and ₹64 per litre for ethanol made from damaged food grains.
The All India Sugar Traders Association (AISTA) indicated that the ethanol blending target might decrease to ten percent in the ethanol supply year (ESY) 2023-24 from twelve percent in ESY 2022-23. This development affects the government’s EBP, which aims to achieve an ethanol blending rate of 15 per cent in ESY 2023-24. As reported by businessline, and according to the AISTA presentation, India achieved ethanol blending of 11.28 percent (147.6 crore litres) as of February 18, 2024, compared to 11.25 percent (114.5 crore litres) during February 18, 2023.
