A REVIEW ON PRODUCTION OF ETHANOL FROM SUGARCANE MOLASSES & ITS USAGE AS FUEL

In the year 2008, the Government of India announced its National Policy on biofuels, mandating a phase-wise implementation of the programme of ethanol blending with petrol in various states. This examines demand and supply aspects of the ethanol blending policy (EBP) of the Government of India. In the last two years, the demand from the industrial sector could not be fully met domestically and was met by imports. The study examines the main sectors using ethanol. The preparedness of the automobile industry is a major factor in the successful implementation of this policy. In 2008 India imported 128.15 million metric tons of crude, constituting 75% of its total petroleum consumption for that year. By 2025 it will be importing 90% of its petroleum. In an effort to increase its energy security and independence, the Government of India in October of 2007 set a 20% ethanol blend target for gasoline fuel to be met by 2017. In India, the vast majority of ethanol is produced from sugarcane molasses, a by-product of sugar. In the future it may also be produced directly from sugarcane juice. The main objective of this study is to develop an economic framework to determine the implications of the 2017 blend mandate for India's food and energy security and allocation of land and water between food and fuel production. This is accomplished through the development of a static, spatial, multi-market economic model. The model is a partial equilibrium model which includes eight markets for agricultural commodities: wheat, rice, sorghum, corn, groundnut, rapeseed, cotton, and soybean in addition to the markets for sugar, alcohol and fuel (gasoline and biofuel).