India to hit E10 blending target in 2022

USDA forecasts fuel ethanol demand to rise by 26%

India’s consumption of fuel ethanol will rise 26% in 2022 compared with last year, the US Department of Agriculture forecast in a report published on Wednesday, June 15, citing the country’s scale-up of its effective biofuel blending rate in gasoline to almost 10%.

Although India’s intent to use waste-based feedstocks in both its ethanol and biodiesel blending targets is likely to mean it falls short of its aims, the USDA said that Asia’s third-largest economy had nonetheless made “extraordinary” progress in ramping up biofuels use and will soon become the third-biggest market for ethanol after Brazil and the US.

In 2022, India is estimated to achieve an average annual national ethanol blend rate of 9.3%, a new record, and a 15% increase over last year

The report also added that the country’s fuel ethanol consumption is forecast to reach 4 billion liters this year, up from 2.95 billion liters in 2021.

The GAIN report noted that the utilization of alternative feedstocks, such as rice, maize, and damaged food grains toward the country’s 20% by 2025 mandate “would be extremely challenging given the limited availability, lower yields (especially for maize) and the colossal effort necessary to expand distillation infrastructure by approximately five billion liters within the next three years.”

It added that associated infrastructure requirements, such as interstate transportation and national rail networks, remained “a work in progress.”

“Therefore, achieving E20 by 2025 seems unlikely,” the report said.

Yet the report did assert that India had shifted to being a structural surplus producer of sugarcane and, over the last five years, had ensured ample supply of feedstock.

It added that the pricing/tendering system is being managed for the first time in India and could play a role in building up fuel ethanol supply.

“Despite continuing logistical challenges, increased diversion toward ethanol will offset supply-demand gaps. For the first time, India is within reach to achieve its E10 blend target, which will occur in ESY 2022,” the report said.

The USDA GAIN report said the nameplate capacity of both fuel and industrial ethanol production would rise to 5.7 billion liters this year, up from 4.3 billion liters in 2021, although this significant increase would mean the average capacity utilization would fall to 62% this year, down from 76%.

The US researchers said they estimate India’s 2022 imports will shrink 2% to 635 million liters (mostly denatured ethanol imported from the US for industrial use) due to higher prevailing global ethanol prices.

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