Budget 2022: Ethanol Blending
In order to keep up with the climate change and sustainable development goals, the government of India is increasingly promoting the use of ethanol-blended petrol in the country. The government has advanced the target of achieving 20 per cent ethanol blending in petrol (called E20 fuel) from 2030 to 2025 under EBP (ethanol blending policy) to quicken the shift from unblended petrol, which causes even more carbon emissions. The finance minister, in her speech, laid out the plan to levy a surcharge on unblended fuel. From here on, unblended fuel shall attract an additional differential excise duty of Rs. 2 per liter from the 1st of October 2022. This step has been announced to reduce the share of unblended petrol in the country which will further help reduce the emission of harmful particles. This will also help bring down India’s petroleum imports.
Apart from that, the production of ethanol in the country for blending purposes will provide farmers with a much better price for their sugar and grain produce. Due to the high production and availability of large stockpiles, the two commodities price was falling. The farmers will get a much-needed relief by diverting the two commodities towards ethanol production. The government has already asked major petroleum companies to tap 12 companies that will produce and supply ethanol to them for blending purposes. The blending of ethanol is a priority for the government, and it aims to achieve the E20 level by 2025.