Petroleum Ministry is to ensure that ethanol production is brought under the priority sector lending norm by banks.
- This would encourage sugar mills to invest in adding distillery capacity & ensure that they could take loans for this at 2-3% less than the existing market rates.
- Centre has planned to augment ethanol storage facilities, so that sugar mills could raise output without worrying about storage and transportation.
- Ministry has sought an assurance from the mills that they’d produce enough ethanol to achieve a full 5% blending with petrol.
- Government rules mandate 5% ethanol blending with petrol for more than a decade but the target has never been met, due to disagreement over the price OMCs would pay to millers.
- Production of ethanol from sugar distilleries is the second biggest pollutant of the Ganga river.