Recently, the union cabinet approved amendments to the National Policy on Biofuels to advance the date by which fuel companies have to increase the percentage of ethanol in petrol to 20% from 2030 to 2025. Ethanol, or ethyl alcohol, is a hydrocarbon. When burnt, it can generate heat and power engines. The use of ethanol as a fuel for internal combustion engines is beneficial due to its environmental benefits (fewer emissions) and long-term economic advantages over fossil fuels. It can immensely help a country like ours which is heavily dependent on the import of fossil fuels.
The policy of introducing 20% ethanol is expected to take effect from April 1, 2023. India has been slowly moving towards creating an ecosystem to have more ethanol blended into petrol for use in vehicles, particularly two and four-wheelers.
Ethanol is produced by fermenting sugars. Simple sugars are the raw materials commonly derived from sugarcane, sweet sorghum, and sugar beet to produce ethanol. In India, ethanol is primarily produced using sugarcane molasses.
Stocks to watch out for
Balrampur Chini Mills Ltd: Balrampur is one of India’s major integrated sugar manufacturing companies. The Company mainly manufactures and sells sugar. Besides this, the allied business activities include Ethyl Alcohol & Ethanol, the generation and sale of power, and the manufacturing and sale of agricultural fertilizers.
EID Parry (India) Ltd: The Company is a significant player in Sugar and Nutraceuticals. It presently has 6 sugar factories that can crush 43,300 Tonnes of Cane per day and generate 140 MW of power and five distilleries with a capacity of 297 KLPD. The company also has a presence in Bio Pesticides.
Praj Industries Ltd: Praj provides solutions to the Distillery Industry. It has expertise in Bioprocesses and engineering. It delivers know-how, license, engineering design, plant & equipment, project management, commissioning and, customer care, and turnkey projects. It caters to both domestic and international markets and further provides design and engineering services.
Shree Renuka Sugars Ltd: Renuka Sugars is an integrated manufacturing company focusing on Sugar and its allied products in Power and Ethanol. It has the largest sugar refining capacity in India of 4000 Tons Per Day (TPD). The Company is principally engaged in manufacturing and refining sugar, ethyl alcohol, ethanol, and generation and sale of power.
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– Debraj Guha Thakurta & Nischay Avichal
