First EOI for long-term agreement with upcoming ethanol plants receives overwhelming response
20 Sep 2021
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The first Expression of Interest (EOI) for signing long-term agreement with upcoming dedicated ethanol plants for supply of ethanol has received an overwhelming response, with 197 bidders participating. The EOI was published by BPCL on behalf of state-run oil marketing companies on 27 August, which opened on 17 September. The bids are currently under evaluation.
Thanking all the bidders for making the EOI a big success, union minister of petroleum and natural gas and housing and urban affairs Hardeep Singh Puri said the EOI is a proactive step taken by the petroleum ministry and oil companies to motivate project proponents to set up ethanol production plants in ethanol deficit states. This, he said, will pave the way forward for the nation in achieving the ethanol blending target of 20 per cent and more in the coming years.
Oil marketing companies last year procured 1.73 billion litres of ethanol, while achieving 5 per cent blending during 2019-20. The target for ongoing year 2020-21 is 3.25 billion litres, which will take the blending to 8.5 per cent. Actual achievement during 2020-21 so far has been 2.43 billion litres, accounting for 8.01 per cent blending.
The government has announced five different rates for ethanol based on feedstock used for ethanol production. The raw materials include sugarcane juice/sugar / sugar syrup and molasses from sugar factories besides damaged food grains and surplus rice with the Food Corporation of India (FCI).
GST and transportation charges are being paid extra. Besides, other incentives being provided for ethanol production include: long term visibility/offtake assurance; interest subvention scheme for capacity addition; differential remunerative price of ethanol; relaxed EOI conditions/reduced bank guarantee requirements and penalty for non-supply; and procurement priority within state boundary limits.
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