• In order to boost ethanol capacity in sugar mills, the Cabinet Committee on Economic Affairs (CCEA) has cleared an extra soft loan of Rs 15,500 crore under a recently launched scheme.
• The government will bear an expenditure of Rs 3,355 crore as interest subvention for this. This includes a soft loan of Rs 2,600 crore which will be provided to molasses-based standalone distilleries to augment capacity and set up new units.

Ethanol Blended Petrol (EBP) Programme:

• It was launched by the Government in 2003 on pilot basis which has been subsequently extended to the Notified 21 States and 4 Union Territories to promote the use of alternative and environmental friendly fuels.
• It aims at blending ethanol with petrol, thereby bringing it under the category of biofuels and saving millions of dollars by cutting fuel imports.
• Ethanol Blended Petrol Programme is being implemented by the Ministry or Oil Marketing Companies (OMCs).
• This intervention also seeks to reduce import dependency for energy requirements and give boost to agriculture sector.

Analysis:

• India is the third largest consumer of energy in the world after China and the US. Currently, the country is dependent on imports for about 82.1% of its crude oil requirement and to the extent of about 44.4% in case of natural gas.
• India is expected to need 10 billion litres of ethanol annually to meet the 20% blending target in 2030 if petrol consumption continues to grow at the current pace. At present, the capacity stands at 1.55 billion litres a year.
• Considering the current ethanol capacity of 355 crore litres, the country is expected to cross 10 per cent blending with petrol in the next year itself, he said.
• Ethanol extracted from sugarcane will be used for blending in petrol and will provide cane farmers a remunerative price for their crop. Ethanol doping in petrol would also help the country cut its oil imports.
• India, the world's second-biggest producer, is likely to produce 30.7 million tonnes of sugar in the current marketing year, compared with 32.5 MT during 2017-18.