Indian Oil, BPCL, HPCL Sign Long Term Purchase Agreement For Dedicated Ethanol Plants

The Ministry of Petroleum & Natural Gas announced on May 11 that state-run oil marketing companies (OMCs) Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) have entered into a long-term purchase agreement for upcoming dedicated ethanol plants across India.

OMCs, project proponents, and banks of the different ethanol plant projects signed the first set of tripartite agreements.

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Three banks are participating in this tripartite arrangement with OMCs and project proponents: State Bank of India, Indian Overseas Bank, and Indian Bank.

The arrangement is intended to ensure that payments received by ethanol plants are used to service the loans that these banks have issued.

The government’s Ethanol Blended Petrol (EBP) programme requires that ethanol generated by these specialised ethanol facilities be sold to OMCs for blending with gasoline.

Payment for the delivery of ethanol will be deposited into an escrow account with the financing bank to guarantee that the loan is serviced on time.

Micromax Biofuels Pvt Ltd of Bihar, Eastern India Biofuels Pvt Ltd of Bihar, Muzaffarpur Biofuels Pvt Ltd of Bihar, K P Biofuels Pvt Ltd of Madhya Pradesh, and Vizag Biofuels Private Limited of Madhya Pradesh inked the agreements.

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“India achieved 9.90 percent ethanol blending in 2021-22, utilising 186 crore litres of ethanol and saving over 9,000 crore in foreign cash,” the ministry stated.

The goal of obtaining 20% blended ethanol by 2025 has been advanced by the government. To meet the aim in 2025-26, the country will need 1,016 crore litres of ethanol. However, based on current availability, there is a 650 crore ethanol shortage. These five projects are expected to produce roughly 23 million litres of ethanol per year.

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The carbon dioxide emissions from ethanol-blend gasoline are reduced by 38%.
Sandeep Poundrik (IAS), Principal Secretary, Department of Industries, Ashwani Bhatia, MD State Bank of India, and Sukhmal Jain, BPCL all spoke at the occasion.

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