Bihar launches Ethanol Production Promotion Policy, 2021

After the approval of the policy by the state cabinet, Bihar became the first state in India to have an ethanol promotion policy under the National Policy of Biofuels, 2018.

Ethanol Production Policy
Ethanol Production Policy

The minister of State Industries, Syed Shahnawaz Hussain on March 19, 2021, launched the Ethanol Production Promotion Policy, 2021.

After the approval of the policy by the state cabinet, Bihar became the first state in India to have an ethanol promotion policy under the National Policy of Biofuels, 2018.

While speaking at the launch event, Shahnawaz informed that a tripartite agreement between the investors, oil manufacturing companies, and banks will be acting as collateral for the secured loans to establish greenfield standalone ethanol manufacturing units in Bihar.

About Ethanol Production Promotion Policy, 2021:

The policy will allow the extraction of ethanol, which was earlier restricted to sugarcane, from surplus quantities of the maze as well.

 An investor will also get an additional government subsidy of 15% of the cost of the plant as well as machinery up to a maximum of Rs. 5 crores. It will be in addition to the existing incentives under the Bihar Industrial Investment Promotion Policy, 2016.

Key Highlights:

•  The policy will provide remunerative returns to the investors as well as other stakeholders.

•  It will also directly increase the income of the farmers who have been producing feedstock or raw materials for ethanol manufacturing.

•  The financial assistance by the government will be provided to the greenfield standalone manufacturing units that have been producing ethanol as well as supplying 100% of it to the oil manufacturing companies under the ethanol blending program of the central government.

•  The Policy will help in creating employment and will help in reducing pollution. Currently, bioethanol blending in petrol in the country stands at 6.2% while the government has set a target of 20% of blending by 2030.

India to increase ethanol production:

At present, India produces 5.30 thousand barrels of ethanol, which is very low in comparison to Brazil or the USA.

On the other hand, Bihar produces around 12 crore liters of ethanol and is in 5th place in ethanol production in the country. With the implementation of the latest policy, the government aims to make India an ethanol hub and generate 50 crore liters of ethanol every year.

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