During the pilot projects after mixing was done at the oil depots, the fuel was transported in specially designed tanks to keep out moisture. "Even at the retail outlets, special care was taken while cleaning and storing the fuel blend," reveals N R Raje, general manager, ioc r&d Centre. Thus, apart from regularly cleaning underground tanks in petrol pumps, all depots and retail outlets need to install separate pipelines, metering units and silica gel traps to absorb extra moisture. But experts like H B Mathur, emeritus professor, Delhi College of Engineering, who has done several field trials with ethanol-run vehicles, feel that the problem of phase separation gets reduced when the quantity of ethanol is increased from five to 10 per cent.
As for the problems of price and availability, the ethanol industry claims to have successfully tackled them. Ethanol will be mainly produced from molasses, which is a by-product of the sugar-manufacturing process. According to Jai Uppal -- a consultant with All-India Distillers' Association (aida) on ethanol-blended petrol -- besides molasses, ethanol can be extracted directly from sugarcane juice, grains, sugar beet and even agricultural waste. However, "the government's sugar policy prohibits production of ethanol directly from sugarcane juice as only sugar can be made from it", he says.
India is the third largest sugar-producing country in the world with a 10-million-tonne sugar surplus. "If five per cent ethanol has to be blended into the entire petrol dispensed in the country, the total demand comes to 500 million litres. This can be easily met by using two per cent of the sugarcane produced, which works out to 6.4 million tonnes, for directly making ethanol," reasoned Uppal at Ethanol 2002 , a seminar organised by Winrock International India recently in the capital.
On the economics of the decision, so far the distilleries had been selling anhydrous ethanol to oil companies at a price higher than that of petrol. Consequently, oil companies refused to buy ethanol as it would have meant either incurring losses if petrol had to be sold at the same price or increasing the price of ethanol-blended petrol. But the Union government's move to reduce excise duty by 0.75 paise for every litre of ethanol-blended petrol sold has given a financial fillip to the production of this renewable fuel. "Due to the rebate, not only will the oil companies save on crude that needs to be imported, but they will also increase their profits," points out Uppal.
Yet another proactive step has been the customisation of loan schemes to set up infrastructure to produce anhydrous ethanol. Although India produces enough molasses to extract 2,200 million litres of ethanol, an additional set-up needs to be added to process ethanol to its anhydrous form. The cost of setting up this plant is at least Rs 1.5 crore to Rs 2 crore.
The Indian Renewable Energy Development Agency Limited (ireda), a government company, offers loans of up to 70 per cent of the total cost of setting up an anhydrous ethanol plant at an interest rate of 11.5 per cent per annum. Further subsidies are also given on interest rates depending on the robustness of the project. Financial institutions have also taken up the initiative. The Industrial Credit and Investment Corporation of India (icici) offers loans of over $ 225 million for various environment-friendly projects and has tied up with the World Bank, usaid and the Asian Development Bank.
Recent tests conducted at the emissions laboratory at the ioc r&d Centre highlight huge benefits from the use of ethanol-blended petrol, especially in the case of two-wheelers fitted with catalytic converters. "For one, it greatly enhances the life of the catalytic converter," says Malhotra (see graphs: Emission control). Apart from this, ethanol mixing also has an impact on carbon monoxide emissions in new as well as old cars.
On the contrary, mtbe is known to have adverse side effects:
It is a major groundwater contaminant
Studies have proved that it is highly carcinogenic
Studies also show that it does not reduce carbon monoxide and ozone levels effectively.
In August 2000, when the Union government decided to make the use of mtbe mandatory in Delhi, environmentalists like the late Anil Agarwal, former chairperson of the Centre for Science and Environment (cse), lobbied hard with the Union ministry of environment and forests (mef) to stall any such move.
They demanded that a committee be set up to deal with the problem of oxygenates as some of them would inevitably have serious environmental consequences. They also underscored the relevance of product environmental impact assessment procedure over the environmental impact assessment procedure adopted by the ministry.
India should learn from international experiences, they chorused, especially those of the us where the Environmental Protection Agency (epa) had refused to grant a waiver for use of oxygenates to California. As a result, the state was forced to go in for ethanol in a big way. And although the deadline for the complete phase-out of mtbe from petrol has been extended to January 2003 (from December 2002), a jury in San Francisco recently arrived at the conclusion that petrol containing mtbe was a "defective product" and that two major oil companies in the us knew about it when they began marketing fuel containing mtbe. The us government and the Senate have, therefore, decided to ban this product.
India, it seems, has after all learnt some pertinent lessons. Better late than never.