Indian minister says Bihar, country’s poorest state, is “sure to emerge as an ethanol hub”

In India, Sugarcane Minister Nitish Mishra said that “Bihar is sure to emerge as an ethanol hub“.

Bihar, traditionally identified as the country’s poorest state, has seen companies such as Hindustan Petroleum, India Glycols and Birla Sugar vying to lease closed sugar mills to be operated as ethanol plants.

Reliance Industries, Tata Chemicals, Bharat Petroleum, Hindustan Petroleum and Indian Oil are others among the  ten companies seeking to bid on the mills. The facilities would be used to increase ethanol production to meet the Indian government’s existing E5 mandate and proposed E10 mandate scheduled to take effect in October 2008.

India is projected to have a surplus of 11.5 million tonnes, based on a projected 33.15 million tonnes harvest this year, which would be a world record for national sugar production. Recently, 10 sugar-producing states have agreed to a framework for a national E10 mandate. India’s sugar crop this year is expected to exceed 29 million metric tons. With domestic consumption at 19 million tons and exports at 1.5 million tons, the country is turning to ethanol production to avoid a catastrophic sugar glut.

The E10 mandate has been championed by the Agricultural ministry, for one, as a means of handling the nation’s severe sugar overproduction. India is projected to have a surplus of 11.5 million tonnes, based on a projected 33.15 million tonnes harvest this year, which would be a world record for national sugar production. Recently, 10 sugar-producing states have agreed to a framework for a national E10 mandate. India’s sugar crop this year is expected to exceed 29 million metric tons. With domestic consumption at 19 million tons and exports at 1.5 million tons, the country is turning to ethanol production to avoid a catastrophic sugar glut.

Meanwhile, the chaos of implementation has spread to the state level in India. Maharashtra state will remove its interstate export fee on ethanol, to help make production of ethanol from sugar economically viable, but West Bengal will impose a $0.20 per gallon tax on ethanol imported from other states. Bihar and Uttar Pradesh also have imposed an export fee.

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