India: Considering Ethanol Standard
10 September 2007 While blending of fuel with 5% ethanol is optional for individual states, the Ministers have recommended mandatory 10% blending of ethanol by October 2008 throughout the country, except for a few select states.
The recommendation now goes to the Cabinet Committee on Economic Affairs for approval.
The decision was welcomed by many sugar companies that have seen sugar prices and their revenues plummet in recent months due to oversupply of sugar. If the decision is approved, it could benefit sugar producing states, such as Maharashtra and Uttar Pradesh.
However, others have argued that while ethanol is likely to reduce carbon dioxide emissions and lower the fuel import bill, it may lead to water shortages and more expensive food grains. The production of more ethanol would encourage sugarcane production, which will increase water consumption (sugarcane requires four to five times the water of food grains in India) and shift planted areas away from food grains.
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