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IGIDR Seminar: The spillover effect of India’s ethanol blending program

Date January 16 @ 4:15 pm - 5:45 pm
Speaker:  Dr. Deepayan Debnath, Institute for Sustainability, Energy, and Environment, University of Illinois Urbana-Champaign, USA
Date & Hour:  16 January 2020, 4:15 pm
Venue:  Seminar Hall 1
TitleThe spillover effect of India’s ethanol blending program

Abstract:  India is the third-largest global carbon-emitting country. In November of 2016, along with other countries, India has also signed the Paris Climate Agreement and committed to reducing greenhouse gas emissions by 33% by 2030 from the 2005 levels, which require a significant volume of biofuels use. The Government of India (GOI) has introduced the Ethanol Blending Program as early as 2003 with 5% blending rate mandatory and is envisioned to increase the ethanol blending mandate to 10% and 20%, respectively. In India, ethanol is mainly produced from sugar molasses, a byproduct of the sugar industry, as until 2018, GOI strictly prohibits the use of food-based feedstocks in the production of biofuels. The cyclical nature of sugarcane production adds variability to the feedstock (molasses) prices that adds volatility to the ethanol production. The purpose of this study is to determine alternative pathways to achieve the domestic ethanol mandate targets and trace its consequences to the sugar market. A structural economics demand and supply model for India’s ethanol and sugarcane market is developed and used for this study. We find that achieving a 5% blending target by 2027 is plausible. However, reaching 10% and 20% ethanol blending target is challenging in the case when molasses are the only feedstock used to produce ethanol and will significantly rely on international suppliers. In contrast, a 20% blend rate mandate can be met if sugar juice is directly transformed into ethanol.


January 16
4:15 pm - 5:45 pm
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Seminar Hall 1, IGIDR, Mumbai