In a major relief to cane farmers and sugar industry in eastern UP, oil marketing major Indian Oil Corporation has proposed to set up an ethanol plant at an estimated cost of Rs 900 crorein Gorakhpur. The greenfield project will produce ethanol directly by crushing cane. The plant will be set up under provisions of UP Act allowing the production of ethanol directly from cane without producing sugar.
This legislation was passed by UP Assembly during Mayawati’s regime in 2007-12. The proposed ethanol plant will absorb a sizeable quantity of cane produced in eastern UP and also ensure immediate payment to farmers. Official sources said that Chief Minister Yogi Adityanath was keenly following up the project. The IOC sought 50 acres from defunct Dhuriyapar co-operative sugar mill in Gorakhpur for the proposed plant spread over an area of about 100 acres. The proposal came in the wake of Petroleum ministry seeking to strengthen cane-extracted ethanol value chain for mixing in petrol to cut oil import bill and provide remunerative prices to farmers. Several farmers’ organizations across the country have been demanding permission from the government to directly produce ethanol from cane. They also demanded that like solar and wind energy, ethanol was also an energy produced from a natural source and should come under Renewable Energy department and not Petroleum department. The outfits mainatiend that considering it as bio-diesel, ethanol should be brought under the purview of Agriculture department and norms related to these departments be applied to ethanol. Thed Union government has already made it mandatory for Oil Marketing Companies (OMC) to blend 10 percent ethanol with petrol. During the 2017-18 cane crushing season UP has supplied over 55 crore litres of ethanol to OMC compared to 41 crore litres in 2016-17.
The state was easily meeting the target of 10 per cent ethanol blending because of high sugar production. Besides producing ethanol directly from cane, second generation ethanol plant uses modern technology to produce bio-fuel from agricultural residues, such as cane by-products. In comparison, first-generation plants extracted bio-fuel directly from cane and vegetable oils by employing conventional technology.
Cane Commissioner Sanjay Bhoosreddy said that the state government was in favour of floating a joint venture (JV) for the proposed ethanol plant between IOC and UP Co-operative Sugar Mill Federation. However, the proposal would need vetting and subsequent approval of the cabinet, since it involves transfer of land to IOC on lease. The issue was also discussed during the recent Lucknow visit of Union Petroleum minister Dharmendra Pradhan and now the issue was being fast-tracked by the state. Meanwhile, Bhoosreddy said that alternatively, a compressed natural gas (CNG) project was also being considered if ethanol plant proposal did not pass the muster. “There is a proposal to produce CNG from press mud, which is a residual matter of filtration process of cane juice. Press mud can also be used as compost and other organic by-products,” he said. Bhoosreddy said that for the CNG plant, the state government would not explore joint venture route and only contribute with land equity. “In either case, the project would start taking shape by the end of this year,” he said. Recently, the state government had announced a financial package to revive six co-operative sugar mills which would comprise sugar plant, co-generation and distillery units for greater economic viability.