TODAY'S EDITORIAL: Greening Troubles
In less than a year from now, all cars on Indian roads are expected to run on ethanol-blended fuel. Ethanol, which is made from molasses, a by-product in sugar manufacturing, is seen as one of the ways to cut down on costly oil imports.
It is also regarded as a green fuel. The government has set a deadline of October 2008 for oil firms to begin selling 10 per cent blended fuel, also known as E10. But are we ready for it?
There are several roadblocks to meeting the government deadline. One, oil firms are unlikely to have an adequate supply of ethanol. Indeed, they have been struggling to meet the blending requirements for 5 per cent ethanol, which is now mandated in some states.
Though oil firms floated tenders for 560 million litres of ethanol, so far they have managed to procure less than a third of their target. When E10 becomes mandatory in October, the situation will further worsen with demand for ethanol expected to jump to 1,130 million litres.
Two, Indian car owners and the automobile industry are not yet ready for E10. Though some of the latest car models are geared for higher content of ethanol-blended fuel, a majority of the cars on Indian roads would probably have to be modified if they are to run on E10. This is likely to cause chaos.
On the supply side, the situation isn't too good either. The big sugar companies say that they have the capacity to meet the increased requirement of ethanol. However, they are worried about ramping up production of ethanol since they are not sure of the government road map to introduce blended fuel.
Increasing production of ethanol would require major investment by sugar companies, which cannot happen overnight.
While the October deadline for E10 seems like a pipe dream, questions have been raised about the viability of ethanol-blended fuel. In America, government subsidies have ensured that nearly 30 million tonnes of maize is diverted to production of ethanol.
Many American farmers are also switching to maize production from other crops. This has led to an increase in global food prices, particularly of wheat. In the Indian context, sugar-based ethanol poses some problems.
Sugarcane is a water-intensive crop and increased production is going to deplete ground water, which is already dangerously low in India. There is an urgent need to look at other alternatives for producing biofuels such as jatropha and agricultural waste. These are still in a nascent stage.
The government needs to dramatically speed up research in these areas if it hopes to switch to biofuels.