India is one of the largest importers of petroleum products in the world. India imports 82% of crude oils from countries such as Iraq, Saudi Arabia, United States, UAE, etc. During 2020-21 India imported 185 million metric tons of petrol, worth USD 55 billion. Due to the lack of sufficient petroleum reserves in the country to meet the growing domestic demand, India has to increase crude oil imports every year.
In order to address the issue of increasing oil and petroleum imports, the Government of India is exploring several means such as enhancing renewable energy prouduction, using ethanol as an alternative fuel to petrol, etc. The government has set a target to achieve 20% ethanol blending with petrol by FY24. As the cost of ethanol is less than that of petrol, this would help the government to save around USD 4 billion every year on petroleum imports. Moreover, the usage of ethanol as fuel also helps to reduce environmental pollution as ethanol is less polluting when compared with petrol.
The abundant availability of food grains and sugar cane, and the government’s push to completely replace petrol with ethanol in a phased manner are encouraging many entrepreneurs across the country to explore opportunities in ethanol manufacturing and start ethanol production plant.
Helping entrepreneurs planning to setup ethanol production plant, let us discuss about the government incentives, raw materials and machinery required, and other factors involved in successfully starting and running the ethanol production business.