How to Start an Ethanol Production Plant

Ethanol Production Plant

India stands as a significant consumer of petroleum-derived products globally, importing 82% of its crude oil from various countries including Iraq, the United States, Saudi Arabia, and the United Arab Emirates. In the fiscal year 2020–21, India imported 185 million metric tonnes of petroleum, amounting to $55 billion. With the nation's domestic petroleum sources unable to keep pace with the escalating local demand driven by population growth, economic expansion, and urbanization, the need for crude oil imports continues to rise annually.

The burgeoning energy demand, particularly in the road transportation sector, which currently relies on fossil fuels for 98% of its fuel requirements while only 2% is fulfilled by biofuels, underscores a significant opportunity for biofuel integration. Among biofuels, ethanol emerges as a principal alternative fuel source. Establishing an ethanol production industry thus presents itself as a compelling proposition. India grapples with severe pollution issues and has undertaken various measures to mitigate them. Therefore, delving into the ethanol industry and initiating an ethanol production plant aligns with environmental objectives.

The primary aim of such a production facility lies in blending ethanol with petrol. Presently, a 10% ethanol blend is incorporated into petrol, and the Indian government has set a target of achieving a 20% ethanol blend by 2025 through its Ethanol Blended Petrol Programme.

Commencing an Ethanol Production Plant not only aids in pollution reduction but also contributes to conserving foreign exchange reserves and promoting environmental and individual health safety. Instances of health ailments attributed to high pollution levels in India underscore the urgency of such initiatives.

Land Requirement

1. Storage and Cleaning Facility for Grain

2. Facility for Grading and Milling Grain

3. Plant for Liquefaction

4. Unit for Fermentation

5. Facility for Distillation

6. Filtration of Spent Material

7. Evaporation of Spent Wash

8. System for Cooling

9. Plant for Water Treatment

Additionally, other necessary infrastructure such as steam boilers and effluent treatment plants are also required.

Materials needed to initiate the establishment of an ethanol production facility:

• C Heavy Molasses: Yields 250 to 275 liters of rectified spirit per ton.
• B Heavy Molasses: Produces 300 to 325 liters of rectified spirit per ton.
• Sugarcane Juice: Provides 70 to 80 liters of rectified spirit per ton.
• Cereals: Generates 300 liters of rectified spirit per ton.

The Ethanol Manufacturing Process

Fermentation: Initially, Molasses undergo fermentation, followed by the addition of water and yeast. After 24 hours, the fermentation process is complete.

Distillation: Raw materials are purified by passing through a sludge remover before undergoing distillation. During distillation, the fermented wash is heated, causing alcohol to vaporize and subsequently condense for collection.

Government Support in India

The government has implemented varying rates for different raw materials used in ethanol production to stimulate local ethanol production. For instance:

• C heavy molasses – Rs. 46.69
• B heavy molasses – Rs. 59.08
• Sugarcane juice – Rs. 63.45

These rates correspond to the different types of ethanol produced from these raw materials. Furthermore, the government mandates the use of locally produced ethanol for blending with petroleum, prohibiting the blending of imported ethanol. This policy encourages startups and entrepreneurs in India to consider entering the ethanol production sector.

Additionally, the government has reduced the GST rate from 18% to 5% and allows free ethanol movement under the Industries Act of 1951. The government provides a loan moratorium for ethanol production plants and has initiated an interest subvention scheme on loans, contingent on at least 75% of the produced ethanol being supplied to Oil Manufacturing Companies. The government also provides various subsidies and schemes.

IID Membership

Membership programs for business startups offer valuable resources and support to entrepreneurs at various stages of their journey. These programs often provide access to mentorship, networking opportunities, educational workshops, and shared workspaces or office facilities. Additionally, members may benefit from discounts on services, access to funding opportunities, and exposure to potential clients or investors through community events. Joining a startup membership program can accelerate growth, foster collaboration, and provide essential guidance to navigate the challenges of starting and scaling a business.

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