Maharashtra agrees to remove export duty on ethanol
In what could be a major step towards successful implementation of India's ethanol program, Petroleum & Natural Gas Minister Murli Deora announced he succeeded in convincing Maharashtra Chief Minister Vilasrao Deshmukh to remove the export duty on ethanol, facilitating the supply of excess ethanol from Maharashtra to other states. With more than 50 mills, Maharashtra is India's second largest sugarcane and ethanol producing state, contributing around 14 per cent of total sugar output (map, click to enlarge).
India launched its "National programme for the supply of ethanol-blended petrol (EBP)" in November last year and aims to blend 5% ethanol into gasoline across the nation. This will amount to a total production of 600 million liters per annum within three years time. The policy is partly meant to help the country's millions of sugarcane farmers earn more income, as they have been hit by low prices for the commodity.
The Maharashtra Chief Minister announced the withdrawal of the export fee of Rs 1,500 per kilolitre (€0.026/liter or $0.145/gallon), now being imposed on ethanol supplies to other States.
So far, E5 is being supplied in 11 States and three Union Territories covering about 70 per cent of the country's states identified to participate in the program. Over the coming three years, India will be producing 1.8 billion liters of ethanol:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: sugarcane :: poverty alleviation :: duty :: Maharashtra :: India ::
Of this total, oil marketing companies (OMCs) have already contracted 1.4 billion liters and so far procured 1.935 billion litres under the programme as on December 31, 2007.
The programme in a few states, including West Bengal, Tamil Nadu, Chhattisgarh and Kerala, could not be implemented for various reasons. In the case of Kerala, OMCs have finalized tenders but the state excise department is required to issue necessary import permits. The Government of West Bengal is required to issue notification permitting import of ethanol and indicating taxes/levies applicable, whereas the government of Tamil Nadu has stopped ethanol supplies due to reported shortage. In Orissa & Chhattisgarh procurement could not be finalized due to high duties/levies.
Deora said up till now certain procedural impediments affected the free movement of ethanol across states, such as multiple clearances to be obtained for the issue of permits for export of ethanol from one State to another. He therefor launched an initiative to solve the problems, meetings with the state governments concerned.
Maharashtra's withdrawal of the ethanol export duty is the result of these negotiations, and is set to improve supplies to other states.
India is the world's second largest sugar producer after Brazil. Its ethanol program is based on utilizing molasses, sugar and in a later stage bagasse for the production of cellulosic ethanol. In 2007, the country achieved a record sugar harvest, with a production of 162.621 million tonnes, up 9 per cent against 2006. The country now has a sugar surplus of 9.115 million tonnes.
References:
Ministry of Petroleum & Gas: Shri Murli Deora holds discussions with Maharasthra CM for smoothening implementation of Ethanol Blended Petrol programme - January 7, 2007.
India launched its "National programme for the supply of ethanol-blended petrol (EBP)" in November last year and aims to blend 5% ethanol into gasoline across the nation. This will amount to a total production of 600 million liters per annum within three years time. The policy is partly meant to help the country's millions of sugarcane farmers earn more income, as they have been hit by low prices for the commodity.
The Maharashtra Chief Minister announced the withdrawal of the export fee of Rs 1,500 per kilolitre (€0.026/liter or $0.145/gallon), now being imposed on ethanol supplies to other States.
This will ensure supply of excess ethanol from Maharashtra to other States, thus making the ambitious programme run successfully in many States and Union Territories. It will also benefit sugarcane farmers of Maharashtra. - Murli Deora, Petroleum & Natural Gas Minister of IndiaThe Petroleum Minister stressed that the EBP programme is aimed at contributing to energy security through the use of alternative fuel sources, to lower carbon emissions and urban air pollution, and to help sugarcane farmers earn additional income. Despite record global sugar-based ethanol output, prices for the commodity have been low because of record 2007 harvests both in India and in Brazil. India's sugarcane farmers have been urging the government to intervene, with success.
So far, E5 is being supplied in 11 States and three Union Territories covering about 70 per cent of the country's states identified to participate in the program. Over the coming three years, India will be producing 1.8 billion liters of ethanol:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: sugarcane :: poverty alleviation :: duty :: Maharashtra :: India ::
Of this total, oil marketing companies (OMCs) have already contracted 1.4 billion liters and so far procured 1.935 billion litres under the programme as on December 31, 2007.
The programme in a few states, including West Bengal, Tamil Nadu, Chhattisgarh and Kerala, could not be implemented for various reasons. In the case of Kerala, OMCs have finalized tenders but the state excise department is required to issue necessary import permits. The Government of West Bengal is required to issue notification permitting import of ethanol and indicating taxes/levies applicable, whereas the government of Tamil Nadu has stopped ethanol supplies due to reported shortage. In Orissa & Chhattisgarh procurement could not be finalized due to high duties/levies.
Deora said up till now certain procedural impediments affected the free movement of ethanol across states, such as multiple clearances to be obtained for the issue of permits for export of ethanol from one State to another. He therefor launched an initiative to solve the problems, meetings with the state governments concerned.
Maharashtra's withdrawal of the ethanol export duty is the result of these negotiations, and is set to improve supplies to other states.
India is the world's second largest sugar producer after Brazil. Its ethanol program is based on utilizing molasses, sugar and in a later stage bagasse for the production of cellulosic ethanol. In 2007, the country achieved a record sugar harvest, with a production of 162.621 million tonnes, up 9 per cent against 2006. The country now has a sugar surplus of 9.115 million tonnes.
References:
Ministry of Petroleum & Gas: Shri Murli Deora holds discussions with Maharasthra CM for smoothening implementation of Ethanol Blended Petrol programme - January 7, 2007.
2 Comments:
India's annual requirement for E5 programme is 650 million litres. How can OMCs procure 1.9 billion litres for the same programme when total alcohol production is just about 2.2 billion litres (including beverage and industrial usage).
Please clarify
Hi Coyote, we checked things and you're right, the "180 crore liters" are an amount to be distributed over three years time. The original press release was confusing and made it look as if "within" three years time, 180 crore liters would be produced "per annum". We have corrected the numbers.
Thanks,
Jonas
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