The Central government has notified a modified scheme to provide financial assistance to distilleries producing first-generation ethanol from the feedstock, including cereals.
The assistance will be given for capacity expansion, setting up new ethanol distilleries or converting molasses-based distilleries to dual feedstock.
The government states that sugar mills, distilleries or entrepreneurs are required to submit an application in a prescribed proforma to the Union Food Ministry within 30 days from notification for availing assistance under the scheme.
By bringing new grain-based distilleries in the entire country will result in the distributed production of ethanol and save a lot of transportation cost and thus prevent delays in meeting the blending target and benefit farmers across the country.
The state governments have been asked to promote the scheme and encourage entrepreneurs to participate in the plan so that the target set for ethanol production could be achieved well within the timeline.
The state governments have also been requested to facilitate entrepreneurs in arranging land for the project, get environmental clearance at the earliest and setting up distilleries.
The industry associations have also been requested to promote the scheme and encourage their members to participate in it.
Under the scheme, the government will bear interest subvention for five years, including one-year moratorium against the loan availed by project proponents from banks at six per cent per annum or 50 per cent of the rate of interest charged by banks, whichever is lower, for setting up new distilleries or expansion of the existing distilleries or converting molasses-based distilleries to dual feedstock.
For ethanol production, there is sufficient availability of feedstock and the government has also fixed remunerative prices of ethanol derived from the various feedstock.
Further, the government has proposed to prepone 20 per cent blending of ethanol with petrol by 2025.
India will need about 1,000 crore ltr of ethanol for doping in petrol by 2030 to cut dependency on imports for meeting oil needs. The nation currently has a capacity of 684 crore ltr.