Centre Approves Additional FCI Rice for Ethanol Production

General Studies Paper-3

Context: The Union Government approved an additional 2.8 million tonnes of rice from the Food Corporation of India (FCI) stock for ethanol production, raising the total allocation for the Ethanol Supply Year (ESY) 2024–25 to 5.2 million tonnes.

About

• The decision, under the Ethanol Blended Petrol (EBP) Programme, aims to accelerate biofuel use, but has reignited concerns over the diversion of food grains from food security to fuel needs.

What is Ethanol and the EBP Programme?

• Ethanol is an alcohol-based biofuel made through the fermentation of sugar, starch, or cellulose derived from crops like sugarcane, maize, and rice. When blended with petrol, it helps reduce vehicular emissions and dependence on fossil fuels.
• The Ethanol Blended Petrol (EBP) Programme was launched in 2003 and accelerated since 2014. It mandates the blending of ethanol with petrol.
• India has achieved its E20 target — 20% ethanol blending in petrol by 2025 — and now aims to reach 30% blending by 2030.

Significance of the Move

• Energy Security: Helps reduce India’s import dependence on crude oil and promotes energy self-reliance.
• Climate Benefits: Ethanol is a cleaner fuel that emits fewer greenhouse gases compared to pure petrol.
• Rural Economy Boost: Creates demand for surplus agricultural produce, potentially benefiting farmers through better prices.
• Policy Push for Green Energy: Aligns with India’s commitment under the Paris Agreement and targets for renewable energy use.

Concerns Regarding the Move

• Food Security Risk: Diverting 5.2 million tonnes of rice from central buffer stocks could strain the Public Distribution System (PDS), especially during drought years or inflationary periods.
• Price Distortion: Cheap supply of FCI rice (₹50/kg) to distilleries may affect open market prices and hurt the poor.
• Ecological Unsustainability: Rice is a water-intensive crop, and its use for ethanol raises concerns in water-stressed regions.
• Inefficient Use of Resources: Critics argue that ethanol from food grains is not the most efficient or ethical route, especially when alternatives like second-generation (2G) ethanol from waste biomass exist.
• Distortion of Agricultural Priorities: Over-reliance on a few ethanol feedstocks (rice, sugarcane, maize) may affect crop diversification and soil health.

Way Forward

• Focus should shift towards 2G ethanol (from agricultural waste and non-food biomass).
• Establish clear guidelines balancing food security with biofuel goals.
• Improve ethanol production efficiency from non-edible sources.
• Ensure transparent audits on the use of diverted grains and their impact on PDS stocks.