Context:

The Cabinet Committee on Economic Affairs (CCEA) has approved the revision of ethanol procurement prices for Public Sector Oil Marketing Companies (OMCs) for the Ethanol Supply Year (ESY) 2024-25.

More on the News

• The Ethanol Supply Year (ESY) 2024-25 extends from 1st November 2024 to 31st October 2025 under the Ethanol Blended Petrol (EBP) Programme of the Government of India.  
• As per the revised prices, the ex-mill price of ethanol derived from C heavy molasses (CHM) for ESY 2024-25 has been increased from ₹56.58 to ₹57.97 per litre, marking a 3% rise.
• The prices for ethanol produced from B heavy molasses (BHM) and from sugarcane juice/ sugar/ sugar syrup were left unchanged at ₹60.73 per litre and ₹65.61 per litre, respectively.

Significance of the Revision 

• The price revision supports the government’s goal of providing price stability and remunerative prices for ethanol suppliers.
• It will reduce crude oil imports and save foreign exchange (leading to a decrease in Current Account Deficit).
• It will also contribute to environmental sustainability as there will be lesser emissions of CO2 from blended fuels.
• The increase in prices of CHM Ethanol will further ensure sufficient availability of ethanol to meet the increased blending target. 

About Ethanol Blended Petrol (EBP) Programme

• It was launched in January 2003 by Ministry of Petroleum and Natural Gas to promote the use of alternative and environment-friendly fuels and to reduce dependence on imports for energy needs. 
• Earlier, the target to achieve 20% blending was 2030. However, in May 2022, the National Biofuel Policy was amended to advance the ethanol blending target of 20% blending of ethanol in petrol to ESY 2025-26 from 2030. 
• To support the EBP programme, the government formulated the National Policy on Biofuels in 2018. 
• Generally, biofuels are classified into four generations based on the type of feedstock that is used. 

Key achievement of EBP

• Over the past decade (as of December 2024), ethanol blending has saved approximately Rs. 1,13,007 crore in foreign exchange and crude oil substitution of approximately 193 lakh metric tonnes.
• Ethanol blending has increased significantly in India from 38 crore litres in 2013-14 to 707 crore litres in 2023-24, achieving an average blending of 14.60%.
• The government further plans to reach 18% blending during ESY 2024-25.