India's Energy Strategy: Higher Ethanol Blending on the Horizon

India Aims for 20% Ethanol Blending, Increasing Green Hydrogen and Hydrocarbon Production

India will increase its target for blending ethanol in petrol to aim for over 20% blending in the next few months. India has already crossed 19.6% blending of ethanol and can hope to achieve 20% within the next month itself, said Petroleum Minister Hardeep S. Puri.

Speaking at a recent Advantage Assam 2.0 business summit session in Guwahati recently, Puri added that India already has a committee established under NITI Aayog to examine the potential of exceeding the 20% blending. This is in continuation of India's efforts for its mission of weaning itself from imported fuel and towards cleaner sources.

The minister highlighted the fact that the country has a mixing capacity of 1,700 crore liters of which 1,500 crore liters is currently being utilized. It is taking a gigantic stride towards increasing the share of biofuels in the energy basket of the country.

Growing demand for biofuels in India is also driven by the economic imperative of freeing the country from reliance on fossil fuel imports, which is presently at USD 150 billion annually. To diversify its energy source further, the country is exploring green hydrogen, which has not received much attention till now. Puri noted that green hydrogen now costs approximately USD 4.5, but taking it to the USD 2.5 level can be a "revolution" for the energy sector, taking the nation from the traditional fuels to the cleaner ones.

In response to the international move towards clean energy, Puri urged such growing economies as India's, which is growing at 6-7% annually, to balance the short-term energy requirements with long-term sustainability. He again asserted that energy consumption remains one of the best gauges of the economic health of a country, and for India to grow further, access to energy will remain crucial.

India is now consuming 5.5 million barrels of crude oil a day, from 5 million barrels before, and Puri feels that the demand would rise to 6.5-7 million barrels a day in the near future. Having this in mind, the government is performing incredible work to improve exploration and production (E&P) of hydrocarbons to meet growing energy demands.

In this regard, the government plans to export 5 million tons of hydrocarbons by 2030. If achieved, the Indian economy would increase considerably, with the country likely to be a USD 7-10 trillion economy from its current size of around USD 4 trillion. The growth will be driven by increased foreign investment interest in the Indian energy sector, with Shell, British Petroleum, and Chevron noting that they will be investing in India.

Additionally, the Indian government is opening up enormous acres of land to drilling in the form of the Open Acreage Licensing Programme (OALP). The OALP, a bidding system in which investors bid for exploration blocks against available E&P information, will auction 1 million sq km of the country's total 3.5 million sq km sedimentary basin. Till date, 2,00,000 sq km has been auctioned for bidding, and in OALP Round 9, as high as 38% of the bids were for this portion of the region. The government anticipates a huge response of bids to come in the upcoming OALP Round 10.

Conclusion:The increase in exploration activities is aligned with the country's vision of increasing its energy security and guaranteeing sustained economic growth. As India invests in conventional as well as alternate sources of energy, the target is to be energy-independent as well as help global efforts in sustainability. India's ongoing energy reforms, including its push for greater ethanol blending and renewed focus on green hydrogen, demonstrate the country's commitment to balancing near-term energy needs with a greener, cleaner future.

Source: The Economic Times