Oil firms blamed for ethanol stock pile-up (2024)

Ethanol distilleries in the country are faced with high and rising stock of the biofuel amid a demand-supply imbalance that, they allege, is because state-run oil marketing companies (OMCs) are not buying sufficient quantities.

Two executives at OMCs, however, said they are buying as much ethanol as is required to meet the target of blending 15% ethanol in petrol. "The stock at ethanol producers is rising as OMCs are unable to lift enough quantity," said an ethanol industry executive who didn't want to be identified. "This could be due to limited storage capacity at OMCs' depots," the person added. State-run oil marketing companies Indian Oil, Hindustan Petroleum, and Bharat Petroleum purchase ethanol from diverse producers to blend it with petrol at their depots before supplying the fuel to pumps.

These companies did not respond to ET's request for comment until press time Sunday.

But two OMC executives, who didn't want to be identified, said their firms were on course to meet the blending target of 15% for the current year. They said the current trouble in the ethanol industry was an outcome of rapid enhancement in biofuel production capacity in the country. Ethanol company executives confirmed massive capacity buildup in the industry. "A lot of ethanol production capacity has been added in recent years, but OMCs need a limited quantity to meet their 15% blending target for the current year," an ethanol industry executive said. "Next year, when they have a higher blending target of 20%, OMCs may procure more, easing the current supply-demand mismatch." The OMCs may by then also increase ethanol storage capacity at their depots, the executive added.

India's ethanol production capacity was about 13.80 billion litres per year in November 2023, of which 8.75 billion litres were molasses-based and about 5.05 billion litres grain-based, according to government data. The production capacity was about 4.20 billion litres in 2014.

Oil firms blamed for ethanol stock pile-up (1)

    Some ethanol industry executives also attributed the current problem to the government's decision to cap the quantity of B-heavy molasses - a byproduct of sugar production - that can be used as feedstock for producing ethanol this year in a bid to ensure adequate sugar availability. "OMCs haven't yet been able to collate the quantity of B-heavy molasses-based ethanol each distillery can produce and offer to OMCs," the executive quoted above said.

    "Once that is done, OMCs may issue tenders for procurement of ethanol." Some ethanol producers are also unhappy with a recent policy of OMCs to give preference to ethanol suppliers from the same state where the depot is located, disregarding the distance between the depot and the distillery.

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    Oil firms blamed for ethanol stock pile-up (2024)

    FAQs

    What is the future of ethanol stocks? ›

    Top Ethanol Stocks in India in 2024 As Per Market Capitalisation
    • EID-Parry (India) ₹14,533.
    • Shree Renuka Sugars. ₹9,985.
    • Balrampur Chini Mills Limited. ₹11,493.
    • Triveni Engg. ₹9,853.
    Aug 30, 2024

    Which sugar company has the highest ethanol capacity? ›

    Shree Renuka Sugars Private Limited is among the biggest ethanol-making companies in India. It is based in Mumbai, Maharashtra, and comprises a distillery with a 1,250-litre daily capacity.

    What is the problem with ethanol? ›

    Ethanol is corrosive

    Ethanol also burns at a higher temperature than gasoline causing damage to pistons. Any car or truck that is not a “Flex Fuel” vehicle is most likely not equipped with ethanol resistant parts and even less small engines like lawn mowers; motorcycles etc.

    Does ethanol have a future? ›

    The ethanol industry is well aware of its need to decrease its emissions to remain eligible for future programs. The Renewable Fuels Association commissioned the report Pathways to Net-Zero Ethanol: Scenarios for Ethanol Producers to Achieve Carbon Neutrality by 2050 (Emery, Joyce, and Salles, 2022).

    Who is the largest producer of ethanol in the world? ›

    The United States is the world's largest producer of ethanol, having produced over 15 billion gallons in 2021 and 2022. Together, the United States and Brazil produce 80% of the world's ethanol.

    What is the outlook for the ethanol market? ›

    KEY MARKET INSIGHTS

    The global ethanol market size was valued at USD 87.71 billion in 2022 and is projected to grow from USD 92.48 billion in 2023 to USD 135.07 billion by 2030, exhibiting a CAGR of 5.6% during the forecast period.

    Which gasoline has the most ethanol? ›

    There are three general categories of ethanol-gasoline blends: E10, E15, and E85. E10 is gasoline with 10% ethanol content. Most of finished motor gasoline sold in the United States is E10. E15 is gasoline with 15% ethanol content, and E85 is a fuel that may contain up to 85% fuel ethanol.

    What state is the number one producer of ethanol? ›

    U.S. fuel ethanol production

    Iowa is the state with the.

    Which sugar stock is best to buy? ›

    Overview of the Best Sugar Stocks in India Based on Market Cap
    • E I D-Parry (India) Ltd. ...
    • Balrampur Chini Mills Ltd. ...
    • Triveni Engineering and Industries Ltd. ...
    • Shree Renuka Sugars Ltd. ...
    • Piccadily Agro Industries Ltd. ...
    • Bajaj Hindusthan Sugar Ltd. ...
    • Bannari Amman Sugars Ltd. ...
    • Dalmia Bharat Sugar and Industries Ltd.
    4 days ago

    Can cars run on 100% ethanol? ›

    Some flexible-fuel vehicles are able to use up to 100% ethanol.

    Why ethanol is bad for your body? ›

    Chronic ingestion of ethanol may cause liver cirrhosis, affect the nervous system and affect the glands in humans. Ethanol may cause mutations (genetic changes). Ethanol is rapidly oxidised by the body to carbon dioxide and water, with no cumulative effect.

    Why are people against ethanol? ›

    Apart from the scientific evidence that ethanol-based particles in air can kill people and make them sick, more recent scientific analysis links corn for ethanol to declining bee populations, with potentially catastrophic implications for many other high-value agricultural crops (almonds, apples) that depend on these ...

    What is the next name for ethanol? ›

    Ethanol (also called ethyl alcohol, grain alcohol, drinking alcohol, or simply alcohol) is an organic compound with the chemical formula CH 3CH 2OH. It is an alcohol, with its formula also written as C 2H 5OH, C 2H 6O or EtOH, where Et stands for ethyl.

    Will ethanol replace diesel? ›

    In compression ignition (CI) engines, the use of ethanol has been highlighted as effective to reduce particulate emissions, even though it can only be used in blends with diesel or biodiesel or with an ignition improver additive.

    Should I invest in ethanol? ›

    5. Can Ethanol stocks be profitable for investors? Ethanol, as a more environmentally friendly energy source compared to crude oil and other fuels, experiences increased demand. However, investors must evaluate both growth potential and challenges before investing in an ethanol making company.

    Is ethanol a good investment? ›

    Ethanol stocks are considered good investment opportunities due to factors such as high demand for ethanol, government support for the sector, and plans for ethanol uniformity by 2025.

    What is the forecast for ethanol? ›

    The EIA maintained its forecasts that fuel ethanol blending will average 930,000 barrels per day in both 2024 and 2025. Fuel ethanol blending also averaged 930,000 barrels per day in 2023.

    What is the prediction for ethanol? ›

    Ethena Predictions For Next Week, Month, and Years Based on Historical Performance
    Ethena Price$0.2130
    7-Day Prediction$0.3440 (49.03%)
    1-Month Prediction$0.7624 (230.29%)
    3-Months Prediction$0.8032 (247.98%)
    6-Months Prediction$0.6510 (182.02%)
    1 more row

    Why is the ethanol price falling? ›

    The price of ethanol has also fallen, driven primarily by the more than 50-percent decline in the price of corn—the primary ethanol feedstock—since summer 2013.

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