Ethanol Plan: The Centre said the changed perspective should be "Food with Fuel". (File)
Dismissing fears that the Ethanol Plan would affect food security in the country, the Centre said that meeting the foodgrain demand for human and cattle consumption will always remain its first priority, but allowing alternative use of rice and maize will help to bring price stability for farmers.
The Ministry of Petroleum and Natural Gas said in a release that the initiative helps in reducing dependence on imported crude oil, consume our own produced environment-friendly fuel, and pay remunerative prices to the industry and farmers.
According to the press release, in certain sections of the media, there were certain reports linking the ambitious Ethanol Plan with Food Security fears in the country.
It is categorically stated that these reports are unfounded, malicious and bereft of facts. It is very important to understand that for a young country like India while meeting food requirements is of paramount importance, fulfilling the energy needs through all means is also significant, it said.
Thus, the changed perspective should be "Food with Fuel" and not "Food versus Fuel", the statement read.
Fuel demand is ever rising in the fastest growing country and ever-increasing dependence on crude oil imports can grossly hamper our future growth potential. Developing in-house fuels like ethanol, biodiesel, compressed biogas (CBG) has the potential to turn around the energy sector.
During the last six years, this government has injected Rs 35,000 crore into the liquidity starved sugar industry by allowing the conversion of surplus sugarcane-based raw materials (viz sugarcane juice, sugar, sugar syrup) for ethanol production.
For the ongoing season, it is expected that more than Rs 20,000 crore will be injected through the ethanol blending programme alone, which will fuel growth in the rural economy, the most resilient sector in challenging COVID times.
The sugar production for the ensuing sugar season 2021-22 is projected to be about 340 Lakh MT, over and above the opening stock of 90 Lakh MT which is cumulatively much above the domestic consumption of 260 Lakh MT. Out of this, a surplus sugar quantity of 35 Lakh MT is proposed to be diverted to ethanol.
The foreign exchange impact by blending ethanol in petrol has been to the tune of over Rs 20,000 crore during the last six years. For the ongoing year, there will be an additional positive impact of around Rs 10,000 crore.
This money goes into the pockets of common Indians rather than crude oil purchases, the release read.
Higher conversion of maize to ethanol will also enable higher DDGS (cattle feed) production across the country which will again aid the rural economy. This will also encourage farmers to switch crops and change their crop patterns in view of additional demand generated by the diversion of foodgrains to fuel.