Sugarcane shortage and its implications on India’s renewable energy target of ethanol blending
Amid mounting concerns over climate change, there has been a heightened global emphasis on adopting clean energy sources. The most common renewable energy sources currently adopted worldwide include solar, wind, hydro, geothermal and biofuels. Solar and wind account for over 70 per cent of the total installed capacity of renewable energy globally. However, there has been a significant push for other sources, particularly biofuels.
In line with the global trend, the Indian government has taken several initiatives to increase the contribution of renewable energy to the country’s total energy consumption. India aims to have 50 per cent of its total installed power capacity coming from non-fossil-fuel-based sources by 2030. Renewable energy (excluding hydro) accounts for only around 2 per cent of the total energy supply and approximately 12 per cent of the total electricity generation. Solar and wind make up more than 95 per cent of renewable sources, while other sources like biofuel (including ethanol) contribute less than 1 per cent.
The role of bioethanol in clean energy
To increase the share of renewable energy in the country’s total energy consumption and reduce dependence on crude oil imports, the Indian government is promoting an increase in the production of bioethanol. The supply of bioethanol in India has grown from 67.4 crore litres in 2014-15 to 433.6 crore litres in 2021-22. Bioethanol is primarily used for blending in petrol, and currently, around 10 per cent ethanol is blended with petrol. As per India’s national biofuel policy, the country aims to achieve 20 per cent ethanol blending in petrol by 2025.
To reach the 20 per cent blend target, around 1,350 crore litres of ethanol will be required (including 334 crore litres for other applications). This will necessitate an increase in ethanol production capacity from 947 crore litres in December 2022 to approximately 1,700 crore litres by 2025. Most of the current bioethanol production plants are molasses-based, with around 619 crore litres capacity for molasses-based production and 328 crore litres for grain-based. Since molasses-based plants use sugarcane for ethanol production, there is a high dependency on sugarcane. The government has been making efforts to increase bioethanol production from grains, especially corn.
Dependency on crops for bioethanol production
India is the second-largest producer of sugarcane globally, with over 4,942.28 lakh tonnes (lt) produced in 2022-23. Out of this, around 386 lt of sucrose was produced from sugarcane, with 50 lt used for ethanol production and 336 lt for sugar produced by sugar mills. The production of sucrose decreased from 395 lt in 2021-22 to 386 lt in 2022-23 due to reduced sugarcane yield in Maharashtra and Karnataka, caused by erratic and uneven rainfall. Maharashtra and Karnataka together account for over 45 per cent of India’s total ethanol production, which is expected to decline by 10-15 per cent in 2022-23 due to lower sugarcane yield.
The uneven spread of monsoon has not only impacted sugarcane cultivation but also rice cultivation in the country. In the current fiscal year, the Food Corporation of India (FCI) has halted the supply of rice to distilleries for ethanol production due to concerns over rice production following insufficient rains and floods. The lower yield of sugarcane and cereals has affected the overall ethanol production in the country, posing challenges to India’s ethanol blending programme.
Climate change has caused uneven rainfall and flooding across the country in recent years, which is expected to worsen, significantly impacting the production of sugarcane and cereals in the future. This, in turn, may hinder the government’s target of achieving 20 per cent ethanol blending in petrol by 2025, thereby affecting India’s renewable energy goal.
Impact and possible solutions
The reduction in sugarcane yield due to uneven rainfall and floods will have implications for the country’s target for ethanol production, directly affecting the availability of renewable energy sources.
To overcome the limited supply of sugarcane, the country needs to focus on other sugar or starch-rich crops, such as corn, cassava, sugar beet, sweet sorghum, and damaged food grains.
Additionally, there is a need to upgrade the existing ethanol production capacity and supply chain infrastructure and foster proper coordination among various stakeholders in the ethanol value chain.
The author is Senior Manager, Growth Advisory, Aranca.