"Bihar Initiates 9 Ethanol Production Projects, Targets Significant Growth with Approximately 1500 KLPD Capacity"

In a strategic move towards boosting ethanol production, Bihar has set the stage for nine operational projects with a combined capacity of around 1500 kilolitres per day (KLPD). The state, already ranking as the sixth-largest sugarcane producer in the country and enjoying a prime position in water availability, is poised to leverage these strengths to become a frontrunner in national ethanol production.

A senior official from the Bihar State Government highlighted the significance of supportive policies, stating, “Bihar is the sixth-largest producer of sugarcane in the country. Also, it ranks first in water availability. Along these, supporting policy will help the State to become a leader in ethanol production in the country.” These accomplishments are anticipated to be showcased as success stories during the upcoming global investors’ summit, 'Bihar Business Connect 2023,' scheduled for December 13-14, 2023.

Earlier this year, the Central Government revealed that a total of 47 ethanol projects in Bihar have received approval under various schemes between July 2018 and April 2022. These include seven molasses-based, 32 grain-based, and eight dual-feed projects. The central government's 'scheme for extending financial assistance to sugar mills for augmentation of ethanol production capacity' plays a pivotal role by providing soft loans through banks, coupled with interest subvention.

Under the Ethanol Interest Subvention Scheme, the government released ₹9.32 crores in the last three years for four projects in Bihar aimed at enhancing distillation capacities. Notably, during the initial three months of the sugar season 2022-23, approximately 85 Lakh Metric Tons (LMT) of sugarcane, including about 2.5 LMT in Bihar, were diverted for ethanol production in the country.

Despite water being under the purview of state governments as per the Seventh Schedule of the Constitution of India, the Task Force on sugarcane and sugar industry, chaired by a member of Niti Aayog, emphasizes that sugarcane and paddy, primary sources of ethanol, use 70 per cent of the country’s irrigation water. Bihar contributes 5.4 per cent and 2.7 per cent to the total production of paddy and sugarcane, respectively, in the country.

In line with its commitment to fostering ethanol production, the Bihar Government formulated and notified the Ethanol Production Promotion Policy, 2021. This policy aims to make ethanol manufacturing in the state more appealing to potential investors, outlining the government's mission to bolster the development of ethanol manufacturing industries.

Traditionally a leader in sugarcane production and home to numerous molasses-based distillery units, Bihar is strategically positioned for substantial growth in ethanol manufacturing. The National Policy on Biofuels, 2018, and subsequent government pronouncements provide a conducive regulatory and institutional ecosystem for sustainable growth in ethanol and Compressed Bio-Gas (CBG) manufacturing in states like Bihar, blessed with an abundance of feedstocks such as sugarcane, maize, rice, and agricultural residues.

HBL