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Petrochemicals will be a sector to reckon with by 2025: Experts

At the E-conference on "India's Petrochemical Industry Outlook 2021" hosted by Indian Chemical News (ICN), there was a consensus among industry leaders that the future survival of the oil refining industry will depend on petrochemical products. The virtual event moderated by Pravin Prashant, Editor, ICN brought to fore the key growth drivers such as government incentives, shift towards biofuels and electric vehicles, better profit margins and even climate change.

In the longer run, demand for petrochemical might go up, says K. K. Jain, Executive Director, Center For High Technology who feels refining is facing the biggest brunt while there is a big opportunity for petrochemical products, particularly packaging industry that flourished during the pandemic.

Jain is highly pragmatic about the success of biofuels which he says will make the oil and gas industry players shift their priorities. He explains, "There are 12 bio-refineries under a scheme PM Jeewan Yojna. Out of that one is being built by HPCL, two by BPCL and one bamboo-based biofuel refinery by NRL in North East India. Another 8 refineries are yet to come as PSUs are giving priority to biofuels and 2021 onwards, we expect much more aggressive inputs and applications which will come from the transport sector."

Petrochemicals and plastics had a very bad press in the last year, says Chandan Sengupta, Senior Vice President, Haldia Petrochemicals, who wonders what would have happened to the whole packaging industry that made contactless delivery possible. Yet he agrees that sustainability is a responsibility.

"Petrochemical sector is a huge employment enabler and thus the government needs to relax the stringent regulatory bottlenecks and unrealistic tax regime. He also cautions against the lack of enough groundwork to meet the set targets. "The crude to chemicals or C2C is going to be a buzzword. The lesser of fuel oil and more of chemicals," comments Sengupta.

Calling for the integration of refineries with petrochemicals, P. V. Ravitej, Executive Director - Refineries, BPCL talks about the need for tapping product imports worth Rs. 95,000 crore. "Since the priority of Indian PSUs was to ensure the fuel to common man, it ensured that we stay in refining than petrochemicals. However, now after meeting our fuel requirements, we need to rise to the occasion to meet the demand. With decrease in growth of gasoline and diesel by 2020, the focus will be more on petrochemicals. We are expecting the petrochemical will reach 15% from 5% by 2030, resulting in a decrease in import dependency. Going forward, we need to develop new polymers through R&D."

Petrochemicals have outgrown the other basic chemicals, mentions Prasad Panicker, Director & Head of Refinery, Nayara Energy who feels that it has not got the attention due to complexities of the fuel market.

"The refineries are looking back at petrochemicals, the key driver being profitability. Yet despite the fact polypropylene and ethylene offer more profits than fuels and lakh crore of imports trigger huge demand, Indian refineries have to be extra careful in terms of investing as prices of crude oil is a key factor. There should be clarity in terms identifying relevant petrochemicals whether niche or bulk, depending on growth in next 10-20 years," added Panicker.

Panicker agrees with other experts on the integration of refining and petrochemicals to get a feed advantage but points out the need for consciousness about competition.

"It is a globally competitive market and that will decide the future. For blending of oil up to 15% by 2030 and beyond that, we have to develop new technologies. In the next 10 to 20 years, support from the government, correction in custom duties and huge infra projects will pip the growth. With irrigation projects worth Rs. 180 million, PVC pipes are in high demand. Climate change too will play a huge role in growth," adds Panicker.  

Ethanol has huge savings in terms of energy, says Milind S. Patke, Executive Director – Biofuels, BPCL, "While the government was aiming 20% blending by 2030, it has advanced this target to 2025. From the current 325 crore liter capacity in ethanol, there will be a demand for 925 million liters, resulting in a gap of 600 million liters. Traditionally ethanol is produced from sugarcane molasses route but with the government fixing remuneration for different sources including food grains as enablers. There is quite an exciting opportunity for entrepreneurs to expand the market in the next 3 to 4 years. There is huge export potential and we need revamping of existing distilleries for boosting the production. Oil companies are themselves looking at setting up refining plants. IOCL, HPCL and BPCL are looking at producing 150 million litres of Ethanol in Chhattisgarh, Telangana and Orissa with 500-kilo litre per day capacity by 2025."

"Government is working towards creating self-reliance and transformation towards a circular economy," says Samir Somaiya, CMD, Godavari Biorefineries who highlights the growing focus on hydrogen fuels. "To reach the target of 15% Ethanol blending from 8.5%, the government is encouraging the industry to produce additional 5-6 million tonnes of sugarcane to produce 6,000 liters of ethanol per day. Ethanol production from sugar beet, molasses, maize, sorghum and even damaged rice will lead to 12 billion liters from current 5 billion litres."

When you grow crops, you are reducing the CO2. We are not only intercropping but also working with farmers for low carbon farming and work towards a circular economy, adds Somaiya.

Outlining the future strategy, Sudeep Maheshwari, Senior Principal, Kearney stresses the need for one cracker plant each year to keep pace with demand be it polypropylene or polyethylene, the nature of certain derivatives may increase and others may decrease and market factors will play a decisive role in this."

Maheshwari who bats for partnerships and push marketing also points out the need for more efficient feedstock sharing rather than just incentives and duties.

"With western markets saturating fast, India has a big opportunity to tap the potential but global players are a bit reluctant as they fear inconsistency in partners and uncertainties in rules here. Therefore, we must start doing things differently and increase their confidence," added Maheshwari.

Source: Indian Chemical News

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Biorefineries and alternate fuel

Contributory article by Mr. Samir Somaiya in Chemical Industry Outlook 2021 published by Indian Chemical News on Page 84 & 85 

Source: https://www.indianchemicalnews.com/assets/compendium_assets/ICN-Chemical-Outlook-Compendium.pdf

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Godavari Biorefineries to expand ethanol capacity

Godavari Biorefineries is planning to expand its ethanol capacity to 600 klpd in 2022 as our aim is to deliver more than 100 million litres to this programme, says Samir Somaiya, Chairman, Godavari Biorefineries Limited.

The company has already expanded its capacity for making ethanol from 200 to 400 klpd in the last 2 years and Godavari Biorefineries is doubly excited to expand its production capacity further to meet the growing demand and opportunity commented Somaiya.

Speaking on the government's resolve to meet the target of 20 percent ethanol blending in petrol by 2025, Somaiya said, "The Indian sugarcane processing industry is an asset to the country. The advancing of the 20% ethanol blending mandate to 2025 by the Government of India is in response to the increase in ethanol capacities across the Indian sugar industry. The sugarcane surplus in India will find its way in meeting a part of India's energy needs, provide a cleaner burning fuel, mitigate climate change, and provide stability to sugarcane farmer incomes across the country."

"The industry will have the optionality in choosing between ethanol and sugar and will have stable cash flows and a remarkable opportunity for growth," commented Somaiya.

Commenting on the E-100 pilot project launched in Pune by Prime Minister Narendra Modi, Somaiya said, "E-100 has been used in conjunction with E20 in Brazil in flexible fuel cars for many years. Bringing this idea to India will allow for distributed production and distribution. India will be able to meet local transportation energy needs locally. The government has allowed for ethanol to be made from multiple feedstocks including molasses, sugarcane syrup, grain and also 2g. E-100 will encourage carmakers to adapt their vehicles to take this fuel and it will make India more self-reliant, combat climate change, strengthen and help grow the industry and ensure stable livelihoods to the farmer."

Last week, the government has resolved to meet the target of 20 percent ethanol blending in petrol by 2025 which has been now preponed by 5 years, says Prime Minister Narendra Modi addressing the World Environment Day event jointly organized by the Ministry of Petroleum & Natural Gas and the Ministry of Environment, Forest and Climate Change through video conference.

The Prime Minister also launched the ambitious E-100 pilot project in Pune for the production and distribution of ethanol across the country.

Source: Indian Chemical News

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Godavari Biorefineries to deliver more than 100 million litres in EBP Programme

Last week Hon’ble Prime Minister Shri Narendra Modi during the World Environment Day event released the “Report of the Expert Committee on Road Map for ethanol blending in India 2020-2025”. The Government of India released E-20 Notification directing Oil Companies to sell ethanol blended petrol with percentage of ethanol up to 20% from 1st April 2023; and BIS Specifications for higher ethanol blends E12 & E15. The programme is designed so that maximum are accrued to the farmers by way of increase in their income. It is expected that around 165 LMT of grains will be utilized for the production of ethanol thereby creating additional demand and consequently increase in the income by farmers. By 2025, the Government of India is targeting to divert excess sugar to the tune of 60 LMT produced annually for the production of ethanol in order to make timely payments to farmers. More than ₹40,000 crore of investment is expected to come in the expansion / new projects of distilleries which will not only create job opportunities but also spur the economic growth in the area. Also, it is expected that around ₹30,000 crore of foreign exchange will annually be saved once 20% ethanol blending with petrol is achieved by 2025, thus also a step towards “Atmanirbhar Bharat”. In the current ethanol supply year, which started in October, India plans to have 10% ethanol-blending with gasoline. As much as 4 billion litres of ethanol will be needed for achieving a 10% mixing ratio. For 20% by 2023, 10 billion (1,000 crore) litres will be needed.

Sharing views on the development Mr. Samir Somaiya, CMD – Godavari Biorefineries Ltd. said, “The new Roadmap announced by the Honourable Prime Minister, Shri Narendra Modi, on the occasion of the World Environment Day is visionary. The program recognizes the biomass surplus in the country as an asset. The sugarcane surplus in India will find its way in meeting a part of India’s energy needs, provide a cleaner burning fuel, mitigate climate change, and provide stability to sugarcane farmer incomes across the country. The advancing of the 20% ethanol blending mandate to 2025 by the Government of India is in response to the increase in ethanol capacities across the Indian sugar industry. The Government also plans to introduce E20 as a fuel by 2023. The industry will have optionality in choosing between ethanol and sugar and will have stable cash flows and a remarkable opportunity for growth. These policies will transform the face of the industry and indeed the rural economy.”

Speaking on how Godavari Biorefineries is aligning itself with the country’s vision, he shared, “Godavari Biorefineries has already expanded its capacity for making ethanol from 200 to 400 klpd in the last 2 years. We will now expand to 600 klpd in 2022. Our aim will be to deliver more than 100 million litres to this programme. In the future, we will be working to add additional feedstocks to supplement our ethanol production from sugarcane. We are working on feedstocks like maize, sugar beet and 2G to further add to our ethanol production in the future. We are working closely with farmers on their varietal choice of cane, intercropping and agronomy to help them get better yields and output.”

“The Government is also encouraging the production of Bio-CNG and EVs. Sugarcane processing factories can also make Bio-CNG and are already surplus in electricity as they cogenerate power. Godavari is excited to participate in and lead the transition in the industry.” Somaiya further added.

Source: ChiniMandi.com

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Mr. Samir Somaiya in a conversation with ChiniMandi News expressed views on the Indian sugar industry and way forward

The Indian sugar millers have been reeling from various crises like unsold sugar stocks, cane dues, unpaid interests etc. Coronavirus pandemic has also aggravated the crisis exponentially by hitting the sugar industry in terms of trends in feasibility of performance, production capacity, consumer market or precisely every factor that is incorporated to make this wheel from farmer to consumer run smoothly. A bailout package seems to be the only favorable solution demanded by the sugar millers at present.

In a conversation with ChiniMandi News, Mr.Samir Somaiya – Chairman & Managing Director at Godavari Biorefineries Ltd. expressed his views on the current scenario of the Indian sugar industry and way forward.

Speaking on the steps the Government should take in order to bailout the industry from crisis. He said, “The Government is already taking steps in the right direction to help the industry and also see the industry as a growth engine. India has proven itself to be a surplus producer of sugarcane. This sugarcane surplus has to be seen as a resource to meet our food and energy needs. The Government realizes this and has announced a bold policy to encourage the use of sugarcane juice/syrup and B Heavy molasses to ethanol. This will be used for ethanol blending with petrol to meet the energy security of the country. The Government is also encouraging the making of 2G ethanol (from cellulose) and Bio-CNG. These are far reaching changes and will transform the face of the industry and indeed the rural economy. But this process takes time. Sugar companies will need to get regulatory approvals and finance to build these distillation assets. Until then, the surplus sugar will have to be exported.”

“The Government has also announced good policies for the export of this sugar. In the current season, India has exported almost 6 million tons of sugar, the highest ever. We are hoping that the Government of India announces a similar policy for the coming season, so that the Indian sugar once again finds its way in the global market.

The Government should also make sure that the price of sugar and ethanol are remunerative in proportion to the price of cane. Currently, the Indian sugarcane prices as a function of sugar price are among the highest in the world. We understand that the farmer needs a remunerative price, but in that case, the sugar or ethanol price must be raised accordingly. With these policy changes, the Indian sugarcane industry will again be a sunshine industry.” He added.

Commenting on demand, supply dynamics play in the upcoming season considering the after effects of the outbreak of Covid-19 Mr. Somaiya said, “There is definitely a slowdown in the sale of sugar. With much of the economy slowly emerging from the lockdown, we hope that the demand picks up as well. The Government is likely to fix a minimum selling price of sugar of Rs. 33 per kg. We expect the price of sugar to be above this level.”

Sharing his views on what measures Indian sugar industry should take to step up for the ethanol production programme and also how his organization is taking steps to be exemplary for the Indian sugar industry in building a sustainable bio-fuel economy he shared, “The millers must quickly apply for regulatory and financial approvals and take steps to divert their sugar surplus to ethanol.

Godavari Biorefineries Limited is very keen on supporting the Government of India’s bio-fuel economy programme. We expanded our distillery from 200,000 lpd to 320,000 lpd in the last season. For the coming season, we are expanding our distillery capacity to 400,000 lpd. Like many sugar companies in Brazil, we have created optionality in choosing between sugar and ethanol. In the coming year, we will be making ethanol via sugarcane syrup and B Heavy molasses. We expect to divert over 40% of our sugars to make ethanol. As a company, we are also keen on working on 2G ethanol, and Bio-CNG policies that the Government is actively promoting. We have also pioneered the use of renewable feedstocks to make a variety of chemicals, materials and renewable power finding applications in pharmaceuticals, agriculture, flavours and fragrances coatings, and more. We are also working with farmers to help them intercrop and improve their agronomy so that they farm and earn better.”

Being asked, knowing that India can be the largest ethanol producer in the world, what long term policies should the Government take for the industry to develop looking at the current scenario and what immediate measures may be required in making the dynamics of demand supply play well Mr. Somaiya said, “Brazil and the USA are very large players in ethanol in the world, and to get to those levels, India will need a wide variety of renewable biomass. But, the Government is already trying to increase the blending percentage and has made bold targets to move towards a 20% blend rate. I think promoting flex fuel cars like in Brazil would be a next step to further encourage higher adoption. And in states that are already ethanol surplus, the blend rate can be increased quicker.”

Link : https://www.chinimandi.com/diversion-of-sugar-surplus-to-ethanol-is-the-best-long-term-solution-for-the-indian-sugar-industry-chairman-godavari-biorefineries-ltd/

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Signed a Memorandum Of Understanding for working on a project 'Biomass For All’

'Godavari Biorefineries is proud to announce that we we have signed a Memorandum Of Understanding for working on a project 'Biomass For All’, in the presence of the Prime Minister of the Netherlands, Honourable Mark Rutte, and the Minister for Agriculture and Deputy Prime Minister, Carola Schouten.

This project aims to develop and implement new biomass based sustainable value chains in partnership with experts, solution providers, financiers and market players from The Netherlands and India.

We are working on ways to ensure that biomass is transformed into new products to maximise value addition in generating sustainable new business and livelihoods. And we will reduce the negative environmental, social and health impacts (as air pollution) as much as possible.'

Partners : Signed the MOU : Somaiya Group/Godavari Biorefineries Ltd., MVO Nederland (CSR Netherlands), ECOR, Avans University of Applied Sciences, The Biosfera Foundation, Center for Responsible Business (CRB), Chaudhary Charan Singh Haryana Agricultural University, IndiaConnected, Nettenergy, PaperWise, Rika Biofuels Development Ltd., Sonalika ITL, The Energy and Resource Institute (TERI), Thapar Institute of Engineering & Technology (TIET), Wageningen University Agrotechnology & Food Sciences Group (AFSG)

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Samir Somaiya's interview at the World Bio Markets Conference in Amsterdam, held in March 2018

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Our Chairman, Samir Somaiya's article on 'Building a Modern Biorefinery' appeared in the June edition of Industrial Biotechnology

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Samir Somaiya’s Interview at ISO DATAGRO NEW YORK SUGAR AND ETHANOL CONFERENCE 2017

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Godavari Biorefineries Limited opens new R & D center at Navi Mumbai

Godavari Biorefineries Ltd. (GBL), a Somaiya group company, inaugurated its new research & development laboratory, Genesis Labs, at Navi Mumbai, on February 1, 2017.

The new centre will house innovation projects primarily in the areas of biobased chemicals and materials, including novel processes for several well-known industrial chemicals that GBL is currently developing.

Comprehensive architecture of value addition from agricultural feedstock

Speaking at the inauguration of the laboratory, Mr. Samir Somaiya, Chairman & Managing Director, GBL, reiterated the company’s vision to stay in the business of renewable chemicals, despite the several challenges. “We want knowledge to be the differentiator in our business, at a time when sugar, alcohol etc. have become commoditised and politicised. We have drawn a comprehensive architecture of value addition from agricultural feedstock and this research laboratory is a key component of this strategy,” he told a small gathering assembled at the laboratory to mark the inauguration.

Mr. Somaiya also highlighted the challenges posed by uncertainty in the sugarcane business, which have at times seen cane yields plunge from 40-tonnes/ ha to 20-tonnes/ ha, with additional drop in the sugar content of cane juice. “The product portfolio that we are currently planning is an incredible response to the challenges of farming, environmental challenges and commoditisation. Within three to four years we will demonstrate this with concrete projects on the ground,” he promised.

Ethanol: misplaced emphasis on usage as fuel

Prof. M.M. Sharma, former Director, Institute of Chemical Technology, who inaugurated the laboratory, highlighted the role of technology as a driver of growth and a challenger of the status quo. He referred to the long history of innovation in the chemical industry, and the shifting of the feedstock base – from coal, to petroleum fractions and biomass.

According to Prof. Sharma, India had a long-standing policy of using ethanol for chemical manufacture, but a misplaced emphasis on using it as a fuel, by blending in gasoline, has led to the demise of several ethanol-based chemical units. “A valuable molecule is being burnt today, and that too not efficiently. It is far better to convert the ethanol to a oxygenate such as ETBE (ethyl tert-butyl ether), rather than use it directly as a blend in gasoline.”

Sugar factories, he added, should look to exploit bagasse far more effectively, and value-add by making several chemicals, rather than just use it as a fuel in boilers. He also called for gainful utilisation of lignin – available in abundance whenever any biomass is processed.

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