Powering Amrit Kaal: An integrated approach is the key to energy security in the next 25 years

Why in News?

• India launched petrol blended with 20 per cent ethanol (ethyl alcohol), also called ‘E20’, at the recently-concluded India Energy Week, 2023, which will be rolled out in 15 cities across the country in the next two years.
• This is touted to be a landmark green initiative to help the country reduce carbon emissions and ensure energy independence.

 

About Ethanol

• Ethanol is a biofuel naturally produced by the fermentation of sugar extracted from sugarcane and agricultural waste such as bagasse and paddy straw.
• Ethanol, when blended with petrol, will reduce fossil fuel consumption and bring down the country’s import bills.
• The government is supporting advanced biofuel projects through the PM Jivan Yojana with financial assistance of approximately Rs 25,000 crore.

 

History of Ethanol Blending in India

• Since 2001, India has tested the feasibility of ethanol-blended petrol whereby 5% ethanol blended petrol (95% petrol-5% ethanol) was supplied to retail outlets.
• In 2002, India launched the Ethanol Blended Petrol (EBP) Programme and began selling 5% ethanol blended petrol. However, until 2013-14, the percentage of blending never crossed 1.5%.
• Since 2020, India has been announcing its intent to achieve 10% blending by the end of 2022 and 20% blending by 2030.
• The target of achieving average 10 per cent blending (10 per cent ethanol, 90 per cent petrol) was achieved in June, 2022, ahead of the target date of November, 2022.
• Encouraged by the success, the government advanced the target of 20 per cent ethanol blending in petrol from earlier 2030 to 2025.
  • It is in line with vision of India’s Amrit Kaal of becoming energy independent by 2047.
• The current annual ethanol production capacity in the country is about 1,037 crore litres which includes 700 crore litres of molasses-based and 337 crore litres of grain-based production capacity.

 

Significant Achievements

• During the last eight years, ethanol suppliers have earned ₹81,796 crore while farmers have got ₹49,078 crore.
• The country saved Rs 53,894 crore in foreign exchange outgo.
• Also, it led to reduction of 318 lakh tonnes of carbon-dioxide (CO2)
• India’s ethanol blending gasoline has grown from just 1.53 per cent in 2013-14 to 10.17 per cent in 2023 and five second-generation ethanol plants are also being set up that can convert agricultural waste into biofuel.

 

Need for Diversifying Energy Needs

• As per BP energy outlook and IEA estimates, India is world’s fastest-growing major economy with rising energy needs.
  • It will also account for approximately 25 per cent of the global energy demand growth between 2020-2040.
  • Hence it is imperative to ensure energy access, availability and affordability for our large population.
• India’s energy strategy has also been acknowledged the world over as being pragmatic and balanced.
  • When petrol and diesel prices went up by 35-40 per cent in the US, Canada, Spain and the UK, India’s prices have actually gone down in the last 1 year.
  • This is further despite India importing over 85 per cent of its crude oil requirements and 55 per cent of its natural gas requirements.
  • Also, while several neighbouring countries have had dry outs and power cuts to manage demand, there has been no shortage of fuel anywhere in India.

 

How India Ensured Energy Justice Amidst Global Fuel Hike?

• Many states announced massive cuts in excise duty and VAT rates.
• The oil PSUs absorbed huge losses to ensure that the massive hikes in the prices of crude oil and natural gas in the international market were not passed on to Indian consumers.
• Subsidised APM gas for the city gas distribution sector was also drastically increased even at the cost of cutting down the captive use of domestic gas by our own PSUs.
  • APM gas is the natural gas sold by the Participating Companies to customers at Administered Pricing Mechanism (APM) rate as decided by the Government from time to time.
• India also imposed an export cess on petrol, diesel and ATF, and a windfall tax on domestically produced petroleum products to prevent refiners and producers from profiteering at the cost of domestic consumers.
  • A windfall tax is a higher tax rate on profits that ensue from a sudden windfall gain to a particular industry.
  • It is reviewed on a fortnightly basis and are subject to factors such as international oil prices, exchange rate and quantity of exports.

 

India’s Stride Towards Energy Sufficiency

• Ambitious targets: India’s emphasis on both traditional fuel exploration as well as energy transition is making it an attractive energy and power destination.
  • For example, India has also reduced the prohibited/no-go areas in exclusive economic zone (EEZ) by 99 per cent, releasing nearly 1 million sq km for exploration.
• Capacity enhancement: India is also rapidly expanding its petrochemical production, in line with the massive increase in living standards and rapid urbanisation.
  • It is a global exporter of petroleum products and its refining capacity is the fourth-largest in the world after the US, China, and Russia.
  • Efforts are also underway to further enhance this capacity to 450 MMT by 2040.
  • The refining capacity expansion was also one of the major factors in ensuring fuel price stability during the international oil price volatilities in 2022.
• Move towards Gas-based economy: India has also accelerated its efforts towards a gas-based economy by increasing the share of gas from the current 6.3 per cent to 15 per cent by 2030.
  • This is demonstrated in India connecting more than 9.5 crore families with clean cooking fuel in the past nine years.
  • PNG connections have also increased from 22.28 lakh in 2014 to over 1 crore in 2023.
  • The number of CNG stations in India has gone up from 938 in 2014 to 4,900 in 2023.
  • Since 2014, India has increased the length of its gas pipeline network from 14,700 km to 22,000 km in 2023.
• Promoting Green Hydrogen: The National Green Hydrogen Mission has been launched with an outlay of Rs 19,744 crore to develop green hydrogen ecosystem in the country.
  • It aims to accelerate India’s efforts towards 4 MT of annual green hydrogen production by 2030 and is poised to save Rs 1 lakh crore in cumulative fossil fuel imports.
• Consistent demand: Also, India’s purchase of petroleum products from certain nations has actually kept the global demand and supply of around 98-100 million barrels/day balanced.
  • This has thereby kept oil prices in check for the global value chain as without this the global prices would have shot up to $300/barrel.
• Diplomatic ties: India has strengthened ties with countries like the USA (energy trade has gone up 13 times in the last four years) and Russia to ensure a reliable supply of crude oil.
  • It has also expanded its network of crude oil suppliers from 27 nations to 39 nations over the years.
• Strategic market card: India as being the world’s third-largest importer not only ensured affordable energy for Indian consumers but also had a calmed global petroleum market.

 

India’s Holistic Strategy for Amrit Kaal

• India has also remained steadfast in her climate change commitments as demonstrated by its ambitious targets of achieving net-zero in emissions by 2070 and cutting down emissions by 1 billion tonnes by the end of 2030.
• India is also taking an integrated path for transitioning its future mobility pathways. Therefore, India is also supporting electric vehicles through a production-linked incentive scheme to make advanced fuel cells of 50 gigawatt hours.
  • Customs duty exemptions have also been announced for the sector.
• India is also targeting the installation of alternative fuel stations (EV charging/ CNG/ LPG/ LNG/ CBG) at 22,000 retail outlets by May 2024.
• Thus, the recently-concluded India Energy Week 2023 demonstrates India’s Amrit Kaal plan to become a $ 26 trillion economy by 2047, ensuring energy security and achieving energy independence as its key goal.

 

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Q1) What is a Flex engine? 

Ans) Flex engines are those that can run at any ratio of ethanol blending from E20 to E100.

 

Q2) Who chairs the National Biofuel Coordination Committee (NBCC)? 

Ans) The Minister, Petroleum & Natural Gas (MoPNG) chairs the NBCC to provide overall coordination, effective end-to-end implementation and monitoring of biofuel programme.

 

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Source: The Indian Express