Top News

• Ethanol will get subsidy from the center!
• Who will benefit and how?
• How to get interest subsidy?

Ethanol Government Subsidy: The central government has made special provisions for ethanol to accelerate ethanol production across the country and promote green energy. The government has made a big announcement of subsidy for ethanol. The central government has approved an interest subsidy of Rs 4,687 crore for ethanol production projects. Minister of State for Petroleum and Natural Gas Suresh Gopi made this announcement in the Rajya Sabha on Monday. He said that the government has disbursed Rs 2,075 crore to NABARD since 2022-23. NABARD is the main agency disbursing this subsidy.

The government aims to increase domestic ethanol production, promote biofuels and strengthen the ethanol blending scheme. This will help reduce crude oil imports and meet the country’s energy needs. So what exactly is this subsidy for? Who can benefit from it?

How to get interest subsidy?

Under the government scheme, eligible projects will get an interest subsidy of 6% per annum for five years. If the bank’s interest rate is lower, then 50% of the interest charged by the bank will be subsidised. Whichever amount is lower, the subsidy will be the same. This service is available on term loans taken for setting up a new distillery or for producing ethanol in existing units. This includes an initial loan waiver of one year. The scheme covers distilleries producing ethanol from maize, grain and both feedstocks.

Under PM G-1 Scheme

Under the government’s PM G-1 scheme, financial assistance is provided to projects producing 2G ethanol from agricultural waste and biomass. Interest subsidy is provided to partner sugar mills to convert them into ethanol-producing units using various types of raw materials. As per the Ethanol Blended Petrol Inventory, ethanol is subject to 5% GST. State-owned oil companies also enter into long-term purchase agreements with producers.

Strategic oil reserves in Mangalore

Gopi said that out of the 17.5 lakh tonnes of petroleum reserves created by ONGC in Mangaluru, half of the petroleum reserves will be kept for strategic petroleum reserves. The remaining capacity will be used for commercial purposes. According to the government, the total oil storage capacity of the country is equal to the import requirement of about 74 days of clean crude oil. This decision taken by the government will bring huge economic benefits to sugar factories, distilleries and sugarcane farmers, directly and indirectly.