Govt mulls extending soft loans to grain-based distilleries for raising ethanol production capacity

To boost ethanol production in the country, the government is considering extending subsidised loans to grain-based distilleries also under the ongoing scheme, according to government sources.

The sources said both the petroleum and food ministries are of the view that ethanol production cannot be dependent on one feedstock, that is, sugarcane, for achieving the target of 20 per cent ethanol blending with petrol by 2030.

There is a need to look at other agri-feedstock such as rice, maize, sorghum and barley for making ethanol. After several rounds of discussion, both the ministries are of the opinion to extend soft loans to grain-based distilleries as well under the ongoing scheme, the sources said.

As part of an incentive scheme announced in June 2018, the Centre had approved soft loans for sugar mills to set up new distilleries or upgrade the existing ones, expand capacity, and encourage them to divert sugarcane to ethanol making.

Under the scheme, the government has extended twice the interest subvention that comes up to Rs 4,600 crore for a loan amount of Rs 22,000 crore.

ET Energy World
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