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Tamil Nadu’s new ethanol blending policy eyes to attract Rs 5k-cr investment

In a bid to promote Tamil Nadu as an investment hub for alternate cost-effective green fuel, the state government on Saturday introduced a new ethanol blending policy to attract investments worth Rs 5,000 crore in molasses or grain-based ethanol production capacity in the state.

The policy, which will be valid for a period of 5 years from the date of notification, is aimed at helping the state to be self-sufficient and meet the estimated ethanol blending requirement of 130 crore litres over a period of time.

The state’s petrol requirement is estimated to increase to 474 crore litres by FY 2024-25. With transportation sector accounting for nearly one-fourth of GHG emissions, and considering the projected robust growth of the state’s vehicular fleet, there is an immediate need to transition to alternate cost-effective green fuel that mitigates climate change, according to the policy document.

The state government seeks to improve farmer income through price realisation and expansion in opportunities due to ethanol blending as well as revive the sugar industry in Tamil Nadu through improved utilisation of existing mills and diversification to dual feedstock.

Under the policy, it will apply for grain-based distilleries or expansion of existing grain-based distilleries, new molasses and sugar/syrup-based distilleries or expansion of existing distilleries, new dual feed distilleries or expansion of existing dual feed distilleries — of which one feed will be sourced from molasses, conversion of existing molasses-based distilleries to dual feed and conversion of grain-based distilleries to dual feed.

The policy will strive to enhance import substitution through indigenous sourcing and production of fuel grade ethanol, enable capacity creation and diversification of grain-based distilleries. It will seek to mitigate climate change risks and support diversification through reduction in air pollution arising from fossil fuels.


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