India accepts more ethanol projects for loan support

India has approved a further 95 ethanol projects under its interest subvention scheme, which offers government loan support to boost ethanol supplies.

Of these projects, 68 will use grain feedstocks, 20 will use molasses and seven will use dual feedstocks, according to the country's department of food and public distribution.

The department has given 243 projects in-principle approval since the new window under the interest subvention scheme opened on 22 April this year, which are expected to add up to 4.8bn litres of distilling capacity to the country.

The scheme offers financial support to project proponents that already have land and environmental clearance, with applications open until 21 April 2023. The government will assist by funding distilleries' interest at 6pc/yr or half of the interest rate charged by banks, whichever is lower. The government support will be extended for five years, while banks must also offer a one-year moratorium on repayments.

The scheme has been extended several times since it was initially launched in 2018, in an effort to boost Indian ethanol supplies to its Ethanol Blending with Petrol programme. Around 10.16bn l of ethanol will be required to reach the target of 20pc blending by 2025-26, according to the government.

The government also sets pricing oil companies must pay for the biofuel to support ethanol producers, having raised prices for ethanol from all feedstocks for the December 2022-October 2023 supply year.

By Lauren Moffitt