India urges industry to beef up ethanol production

India's government is urging its ethanol producers to boost ethanol production, according to a media reports.

According to a report in the Times of India, the government has said it is ready to purchase the country's entire output.

The development comes in the wake of the Indian government raising the ethanol blending target from 5% to 10%.

"Government is ready to purchase the entire quantity of ethanol produced by the industry. It could think of ways for economically viable production of ethanol," Union Road Transport, Highways and Shipping Minister Nitin Gadkari told ethanol producers.

According to the media report, the minister said ethanol could be a game changer as it is economically viable and environment-friendly.

He said the industry could find ways and means for boosting the production through molasses, bagass, corn or other means and the government was ready to buy the entire produce.

Citing the example of flex-fuel cars in Brazil, Gadkari said India was also on the way to promote such vehicles as this could minimise pollution.

"Under Ethanol Blending programme (EBP), the central government has scaled up blending targets from 5% to 10% to promote blending of ethanol with petrol and its use as alternative fuel," the government has said last year.

The government is also providing soft loans of up to 40% of project costs to sugar mills for setting up ethanol developments, according to the Times of India.