Monday, September 10, 2007

[PBN] India: Push for ethanol blended with diesel


Sugar mills for ethanol in diesel
Ajay Modi in New Delhi

September 08, 2007 01:08 IST

Faced with its worst-ever financial crisis owing to a glut, the sugar
industry is working on ways to mix ethanol with diesel by leveraging new
technology that allows ethanol to be directly produced from sugarcane
without producing sugar.

The Indian Sugar Mills' Association, the industry lobby group, will take
the proposal to Food & Agriculture Minister Sharad Pawar soon, sources
close to the development said.

Currently, ethanol is blended with petrol at 5 per cent in most states
and a proposal to raise it to 10 per cent is awaiting Cabinet approval.

At 5 per cent blending, 550 million litres of ethanol is required a year.

If the government agrees to the ISMA's proposal, the demand could
increase by four times, or 2,200 million litres annually, because the
sale of diesel is four times that of petrol in the country.

One snag in implementing the proposal is that the sugar industry's
ethanol production capacity is only 1,500 million litres. The new
technology, said the ISMA, would meet both expanded ethanol production
and a cutback in sugar production.

Internationally, ethanol is blended with diesel in countries like Sweden
and Poland. In India, the Karnataka State Road Transport Corporation is
running a pilot on ethanol-doped diesel for its buses.

Ethanol reduces the dependence on imported gasoline and, being a green
fuel, also reduces environmental pollution.

Sugar prices have fallen almost 35 per cent in the last one year, thanks
to the record output of 28 million tonnes in the production season
(October 2006 to May 2007).

With bumper sugarcane crops ready for harvest in Maharashtra and Uttar
Pradesh, the two of the country's largest sugar-producing states, prices
are expected to fall further. Most sugar stocks have fallen 50 per cent
or so on the stock markets in the past year.

An official in Indian Oil's [Get Quote] Research & Development division
said that an ethanol-diesel blend was unstable and emulsifiers would
need to be added to make the blend work.

"Also, manufacturers of fuel-injection systems for cars are circumspect
about using an ethanol-diesel blend, which they say will corrode the
vehicle's system," he added.

"So far, an ethanol-petrol blend is a good commercial thing. But a lot
of work needs to be done before ethanol can be commercially blended with
diesel," the official added.

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