K’taka asks Centre to set up monitoring team to resolve problems of ethanol makers

The Karnataka government on Wednesday demanded that the Centre set up a monitoring team to resolve the problems faced by ethanol manufacturers in implementing Ethanol Blended Petrol (EBP) programme.

In a meeting with Union Food Minister Piyush Goyal here, Karnataka Minister for Sugar and Sugarcane Development Shankar B Patil Munenakoppa shared the problems faced by ethanol makers in detail and requested for setting up a monitoring team comprising officials from the Union food ministry, State Cane Commissioners, OMCs and NABARD.

The Karnataka minister also said there is a need to have a long- term pricing formula to encourage setting up or capacity enhancement of ethanol as it will help reduce uncertainties of return on investment for ethanol production.

Among problems faced by ethanol manufacturers, Munenakoppa said oil marketing companies (OMCs) have decided to select maize as the preferred raw material by giving preference to maize-based ethanol over rice and sugarcane/molasses.

”This issue will affect the very purpose of EBP and also the investment made by the sugar factories,” he said in a representation made to the Union Minister.

The Karnataka minister also said that providing preference for new ethanol producing units over existing ones will severely affect the sugar factories and ultimately overall production of ethanol in the country.

He said OMCs have shortlisted very few ethanol plants (only 135) against 500 units approved by the Union food ministry under the interest-subvention scheme and this will affect the sugar factories for getting loans from the banks.

On delay in finalization of supply of ethanol and payment, the minister said OMCs are now making payment after 21 days of supply of ethanol by the units and the units have requested to reduce it to 7 days.

The ethanol makers have also requested for early finalization of supply and timely lifting of ethanol besides demanding OMCs to pay for transportation on to-and-fro basis.

Currently, OMCs are making payment for one side of the transport charges i.e loaded vehicle from sugar factory to stock point of OMC.

The EBP programme was launched in India in January 2003 with an aim to promote the use of alternative and environmentally-friendly fuels that reduce import dependency for energy requirements.

In the meeting, the Karnataka minister also requested Goyal to suggest his counterpart in the New and Renewable Energy Ministry to approve a proposal to set up a Centre of Excellence on Green Energy at S Nijalingappa Sugar Institute in Belagavi district.

Karnataka is the third largest sugar producing state in the country.