New Delhi: The government is set to make a policy framework on large scale production of ethanol from agricultural sources and methanol from coal that will help double farmers’ income, cut down crude oil imports and encourage global automobile companies like Toyota Motor Corp. to launch their flexible fuel vehicles in India, road transport and highways minister Nitin Gadkari said.
Talking to reporters after an inter-ministerial meeting which was also attended by oil minister Dharmendra Pradhan, Gadkari said the move was part of Prime Minister Narendra Modi’s plan to increase farm production by 2.5 times by 2022. It will facilitate setting up close to 1,500 industrial units for ethanol production in villages that will create job opportunities for 2.5 million people. This alternate fuel industry could be worth Rs1 trillion.
Gadkari who chaired the meeting said it was decided the oil ministry will prepare two policies—one on production of ethanol from various agriculture sources and one on production of methanol from coal. Oil ministry will move Cabinet notes on these. Once implemented, the move could bring down crude oil import bill by Rs1 trillion, the minister said. India is the third largest energy consumer in the world after the US and China.
The government wants to have more of alternative fuels on the country’s energy mix as it would bring some moderation in petroleum product consumption, which has been growing. While petrol consumption in the country has been growing in double digits, diesel consumption, which has a larger base, has been growing by about 6% annually. Prime Minister Modi had in 2015 set a target of reducing import dependence on hydrocarbons by 10 percentage points to 67% by 2022.
According to Indian Oil Corp. chairman B. Ashok, there is scope for every kind of fuel to grow in the country in view of the energy demand and economic growth rate. State-owned refiners Indian Oil, Hindustan Petroleum Corp. and Bharat Petroleum Corp. are in the process of setting up ethanol production plants.
The transport minister also said biofuels are encouraged in countries like the US and Canada and that companies like Toyota Motor have engines that use 22% ethanol blended petrol and 15% ethanol blend diesel.
Gadkari said India is getting just 3% of ethanol and that there is a huge potential for increasing its share in the energy mix and reduce oil imports.