Praj Industries hopes government investment to boost bio-fuel sector in 2017

MUMBAI: The government’s thrust on cutting emission, backed by investments committed by public sector enterprises would lead to an action packed 2017 for the sector, Pramod Chaudhari, Executive Chairman, Praj Industries, told ET.
State run-oil marketing companies Indian Oil Corporation and Bharat Petroleum Corporation are in pact with the Pune-headquartered engineering company Praj Industries to set up plants to manufacture the so-called second generation (2G) ethanol from non-edible agricultural waste.

The two OMCs along with Hindustan Petroleum Corporation are expected to set up multiple ethanol units based on this technology with an aggregate investment pegged at around Rs 5,000 crore, according to industry executives.

“The year 2017 will see a lot of action in the bio-fuel space. The government is taking firm action to reduce the carbon emission and the PSUs have already signed memorandum of understanding which is a game changer. Private sector will wait for the final policy on bio-fuels, until then, public sector will drive growth,” Chaudhari told ET in an interview.

He said the two units to be set up for IPC and BPCL will be commissioned by early 2019.

Earlier this year, the government has said that it is working on a new policy for non-conventional resources that would increase ethanol blending in petrol to 22.5% and in diesel to 15%, and could potentially save the country Rs 7 trillion on its crude oil imports.

Chaudhari said that Indian automobiles can easily run on 10% ethanol blended petroleum but scaling up ethanol capacity in the country would be crucial to it.

“This is just the beginning for second generation ethanol manufacturing in the country. Even to go up to 10% of ethanol blend would be an uphill task as it will need additional 150-160 crore litres of ethanol,” Chaudhari said.