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India advances 20% ethanol blending target by 5 years to 2025; experts weigh in

Prime Minister Narendra Modi advanced India's target of 20 percent ethanol blending by 5 years recently. On Environment Day, in his address to the nation, he said that ethanol would now be produced across the country with the setting up of food grain waste and agricultural waster distilleries.

This would supplement production which initially came only from 4-5 sugar-growing states.

Apart from providing the country with a greener option, as blending ethanol with fossil fuels reduces pollution, this bio-diesel reduces fossil fuel consumption and thereby lowering the crude import bill.

Furthermore, ethanol also greatly benefits both sugar farmers and sugar mills by allowing for alternate income and reducing the burden of surplus stock.

It is clear that the government intends to capitalise on this option and to do so the industry has been asking for tax breaks among various other incentives.

So will the centre's ethanol push really impact the import bill and will farmers really be able to benefit from that? To discuss this, Manisha Gupta spoke with Vivek Saraogi, MD of Balrampur Chini Mills; Samir Somaiya, MD & Chairman of Godavari Biorefineries and Jose Orive, ED of International Sugar Organization.

Watch the video for more.

Source: CNBC TV18

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Our focus entirely is to be a renewable company with a low carbon footprint : Samir Somaiya, CMD, Godavari Biorefineries

Samir Somaiya, CMD, Godavari Biorefineries Ltd. spoke exclusively to Pravin Prashant, Editor, Indian Chemical News on expansion plans, revenue forecast, Capex plan, market share in Ethanol blending, R&D and sustainability. Excerpts of the interview:

What's your expansion plan for the next 2 years?
We have just completed an expansion plan in our Ethanol capacity. We have spent Rs. 70 crore and have expanded our Ethanol capacity from 200,000 liters per day to 320,000 liters per day last year and 400,000 liter per day in past few months. So, we have effectively doubled our daily capacity of Ethanol. I think in the next couple of years we would like to spend more money further expanding our Ethanol capacity and also enter into specialty chemicals based on Ethanol.  

Two years ago we put 38 million liters into the Ethanol program and in the coming year we expect to deliver 70 million liters and we would like to create an Ethanol capacity in such that it can go to 100 million liters to deliver it into Ethanol production capacity. We make chemicals that go into pharma intermediates and agro intermediates so we have lined up couples of new chemistries that we want to invest in the future so we are planning to expand our footprint in specialty chemicals as well.

I would say 90% of what we produce probably will go under Ethanol blending and 10 to 15 % of production would continue to be catered to customers of ours which we had over the last many years.

What's your revenue forecast for FY 2020-21?
We are anticipating a turnover of Rs. 1,500 crore in 2021. If you look into the past, sugar used to be a large percentage of top line mix. Going forward we anticipate sugar, Ethanol and chemicals will contribute one third each in terms of revenue. Sugar would be about Rs. 400 - 500 crore, Biofuel or Ethanol will be Rs. 400 - 500 crore and Chemicals will be Rs. 500 crore. That's how we are rebalancing our portfolio and then going to grow Chemicals and Ethanol space.  

What is Godavari Biorefineries doing so that its chemical division grows to one third?
I look at Sugarcane and agriculture as a great feedstock for food, fuels and specialties and in specialties we look at the sugar and fibers as the source. So going forward, we would further see the use of Ethanol also for chemical making specialty chemicals and bagasse also to be used making specialty chemicals which go into the market. In the past one year and coming year and a half you will see Ethanol portion expand because that’s where our focus has been and post that we would definitely see emphasis on chemistry and chemical coming out from bagasse and Ethanol.  

Are you planning to have new factories under your expansion plan?
Our current aim is to do expansion in both the current locations. We think that we have a very good base in terms of infrastructure, people and it is easier to do the ground field expansion right now. So this is how we are expecting to go forward from the logistical standpoint and from the human standpoint and this is where we will grow our business.

Are you looking for any Capex expansion in the next two years?
We would be looking at those currently under preparation but we will definitely do a Capex expansion and we would look at expansion in Ethanol and in chemistry and renewable chemistry which we are talking about.

What is your market share in Ethanol blending and how do you see the biorefineries policy of the government of India?
I think the government policy in biofuels is very good. The previous policies used to look at molasses or Ethanol as a bioproduct of the sugar industry. The current policy mixes Ethanol and sugar industry as substitutes and they give optionality to de risk the business as well as to de risk the farming sector so I think the policy is very good.

India has to look at sugarcane surplus as an asset and this policy recognises it as such. So this surplus sugarcane with the policy will start converting to Ethanol and I believe in the next couple of years we will see local Ethanol meeting almost 20% of the gasoline needs or the petrol blending needs all over the country.

I think the policy is very good and as a company Godavari Biorefineries is actually diverting more than 40% of its sugar and cane to Ethanol so we have gone almost towards the Brazilian model where companies in Brazil have and optionality towards almost 50% of its sugars where they can swing between sugar and Ethanol and this is what we have created in our company.

More than 3 billion litres have been bid and we will be around 17 million litres so market share is actually small but I would like to say we have pioneered the use of sugarcane juice and syrup for Ethanol. This is a new policy by the government of India earlier it was molasses and they have also allowed sugarcane juice and syrup and I would like to say that we have been working on one of the first few to pioneer the use of this to make Ethanol. So in that sense we have done a good job.

How big is the biorefineries blending market in India?
This coming year we should blend about 7-8% of gasoline or petrol with Ethanol and the government wants to take it to 20% that’s how big it is. The nice thing about Ethanol is it's a low carbon greenhouse gas or climate change mitigating fuel and it drives the rural economy so in terms of rupees, I think they are wanting about 300 crores litres and if you multiply with about Rs. 55 - 60 a litre.

Where do you stand viz a viz other players in the biorefineries blending market?
We would be one of the larger players. The issue is we have one Ethanol based facility and this one Ethanol based facility is at a single point I think we do 400,000 litres per day and it’s among the larger one in the country but there might be others who have 100,000 litres per day and we might have 5 or 6 of them. Our approach as a company is to go deep rather than to do a horizontal experiment. We want to make value out of that stick of cane and we want to go into the de risking approach. We would be amongst the largest.

Do you have inhouse R&D or do you have tie-ups with R&D institutions?
We have a combination of both. We have a very good research lab in New Mumbai and we do a lot of our own research with our scientist and we don’t think we have the answers for everything so we do tie-ups with education institutions with research labs and we think its partnership and collaboration which will take us forward.

Any numbers to the R&D budget which you invest?
More than numbers, it's lots of people. We have 25-30 scientists working on the R&D front and that numbers change year on year. We have accruable research which is a strong point for us. Like all chemical companies we have also launched your own hand sanitizers product called ‘Pavan’.

How has the hand sanitization market done for Godavari Biorefineries?
To be honest in the beginning it was very good but we need to develop a much better B2C marketing capabilities to succeed.

On the sustainability part are you also looking at becoming net zero at some point of time?
Currently, we are measuring our current carbon footprint. We are quite ahead already but definitely our game is to be sustainable even outside the ecosystem which is farming system and sustainability with the company. We were in fact one of the first in India to even get a million dollar to set up a cogeneration plant 20 years ago and at that time cogeneration from Bagasse was not very common in India. We got grants from the USA and to demonstrate how greenhouse gas mitigation plants can be done in the company. Our focus entirely is to be a renewable company with a low carbon footprint.

Anything specific which you are working on sustainability?
I talked about the whole emphasis on sustainable farming and that itself is a big focus on how to make farming more sustainable. I talked about simple issues like extracting potash from ash that itself creates a more circular economy and also creates a different sustainability.

Godavari Biorefineries would be completing 81 years. How do you see this complete journey?
I would love to say that we are ready for the future.

Source: Indian Chemical News

• Read more about Our focus entirely is to be a renewable company with a low carbon footprint : Samir Somaiya, CMD, Godavari Biorefineries

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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Shri S.G. Mokashi takes over as Chairman of CHEMEXCIL w.e.f. 15th February 2021

Link : https://chemexcil.in/circulars/shri-s.g.-mokashi-takes-over-as-chairman-of-chemexcil-w.e.f.-15th-february--2021/5225/d3d34b1b87fde26ce7684bb135e3e7b4.html

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Godavari Biorefineries Ltd. Expands Its Ethanol Production

Godavari Biorefineries Ltd., one of the pioneers in the manufacture of alcohol-based chemicals in India has increased its ethanol manufacturing capacity from 320,000 liters per day to 400,000 litres ethyl alcohol per day. The company is targeting to divert 40% of its sugar in cane to make ethanol using sugarcane juice and B Heavy molasses. With this development, the company will have a capacity of over 100 million liters of ethyl alcohol in a single location.

Sugar, a low carbon source of energy, is not just an environmentally friendly source to produce ethanol but also drives the rural economy. The livelihood of a significant number of small farmers in rural India depends on the farming of sugarcane, production of Ethanol using sugar will support the growth of such farmers.

Samir Somaiya, Chairman and Managing Director, Godavari Biorefineries Limited, said, “Since the inception of the company, we have worked towards building an environmentally friendly eco-system in our company. With the increase in capacity of production of Ethanol, we are not only growing our business but also helping the entire ecosystem flourish.”

While the world is moving towards sustainable practices to reduce carbon footprints, governments all over the world are promoting policies/programs to encourage companies/industries to incorporate green practices. One of such programs introduced by the Indian government is the Ethanol Blending Program, which sought to promote the use of alternative and environment-friendly fuels and to reduce import dependency for energy requirements. The Government expanded the size of this programme by allowing the use of sugarcane juice/syrup and more recently other feedstocks.

Godavari biorefineries Ltd., one of the first companies to associate with the expanded program and supplied a large quantity of ethanol to the Ethanol Blending Program last year. Earlier this year, the company delivered 38 million liters of ethanol to the program. Godavari Biorefineries pioneered the use of sugarcane syrup for making ethanol by diverting almost 30% of sugarcane directly following the Brazilian model. This year, the company is contracting to deliver more than 70 million litres for the ethanol blending programme. In the future, the company plans to produce more than 100 million litres in a single location.

About Godavari Biorefineries Limited

The Godavari Sugar Mills Ltd., incorporated in 1939, demerged to Godavari Biorefineries in 2009. Godavari Biorefineries Ltd. promoted by Late Shri. Karamshibhai Jethabhai Somaiya (Padmabhushan) and his son, Dr. Shantilal Karamshibhai Somaiya, was incorporated in 1939 and has been contributing to the industrial development of India for more than six decades.The Company with three Sugar mills is fully integrated and is among the top ten Sugar complexes out of around 500 sugar manufacturers in India. The Company is one of the largest producers of Alcohol & a pioneer in manufacture of Alcohol based Chemicals in India.

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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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Transition to Specialty chemicals

How is the market for green / renewable chemicals evolving globally and in India?

We see a big increase in the need for renewable/green chemicals. This trend is more visible globally. Large international companies are making public commitments to us renewable chemicals, biodegradable packaging, carbon neutral processes, and making a more sensitive approach to people, climate and the planet going forward. In this, there is a huge opportunity for companies in the renewable space to go forward.

To what extent renewable chemicals can replace the conventional chemicals and petrochemicals in India and what are the major concerns that will have to be addressed at various levels in India?

Renewable chemicals can be used in various ways and can be ‘Identical’ except that these are made from renewable sources. For example, one can make acetic acid from renewable sources that is made otherwise from petroleum feedstock. ‘Drop-ins’, and can completely substitute conventional materials; although they may be chemically different, with no loss of functionality. Green chemicals can also be completely different from material derived from conventional feedstock and have different properties but still may have the same end use. Some of the renewable chemicals may not have a fossil substitute.

In each of these cases, the substitution will depend upon many factors. One of the very first point is if the price of the renewable chemical can compete with that derived from fossil sources. Second, whether the end use segment is willing to pay a price premium for a renewable derived feedstock. We find that this is often the case in the skin care sector. In such cases, responsibly sourced, traceable, renewable and/or biodegradable chemicals can command a price premium from the end customer. Third point is whether the material properties can help command a better price. Finally, in some markets, the Governments are creating policies that promote the use of renewable raw materials. Since your question particularly concerned India. In my opinion, bio-ethanol is a ‘Drop-in’ and there is a favorable Government policy to help encourage that blend to help our energy security and a lower carbon future. For chemicals, the market needs to mature to give us more value. But I think that consumer preferences are changing, and there are niche markets that reward use of such chemicals, and it is a matter of time before some end use segments grow the use of these feedstocks.

How friendly are the policies in our country to support the growth of renewable chemicals and protect the domestic industry from imports?

In India, there are no policies for renewable chemicals. The Government has created policies for renewable fuel (ethanol blending), and also Bio-CNG. However, this support is not extended to the chemical sector. In the EU and the USA, there are significant policies encouraging the investment in research, pilot plant, and commercialization of renewable processes and technologies. Further, there are policies in place to influence the attractiveness of these products. The US Bio-Preferred Program is one such example. The Carbon markets are also another way to help the economic viability of such initiatives.

Tell us about the Godavari bio-refinery model and how has the organization continued to stay financially viable? How have you addressed the cost challenge across the customers in India though these lead to higher ROIs across for the user industries?

Godavari Biorefineries is using four strategies for the future. The Government has encouraged the making of ethanol from sugarcane juice or syrup for blending in petrol for our transportation needs. Godavari was one of the first companies to aggressively adapt to this environment and supplied a large quantity of ethanol for the purpose this past year. This provides us much needed optionality to swing between ethanol and sugar based on the demand supply gap in sugar or ethanol. Currently, we are increasing our ethanol capacity to 400,000 lpd. With this we will have a capacity of over 100 million litres of ethyl alcohol in a single location. In the chemical sector, we are making a transition to specialty chemicals. In the past few years, we have successfully introduced new chemicals that are in the fragrance or skin care field. We are also establishing more long term relationships with global companies that share our vision of a sustainable future, so that we can jointly develop products with their involvement. This ‘joint’ development approach helps us know the target product cost and quality of the customer. Achieving the same helps them achieve their ROIs. Bio-refining means products from agriculture and we work closely with the farmer to help enhance yields and productivity, in order for the farmer to be financially better off, and the farm and soil to be healthy. To promote well grown and well processed foods, we have established a brand ‘Jivana’ to promote pure and high quality food products that we need on a daily basis.

When & why did your organization stop producing acetic acid and took the decision to restart the business on demand in October 2018 which received USDA certification in next few months?

We stopped making Acetic Acid over a decade ago. In this case, we made the same chemical from renewable sources (ethanol) that is also made from fossil resources. With the reduction in import duties, the entire Indian alcohol based chemical industry that made acetic acid from ethanol found itself unable to compete with petroleum sources. Along with all the others, we too shut down. We reinvested and resumed the manufacture of acetic acid only on a very small scale. There are a few customers the world over desire to buy this product because their end market segment is ready to pay a premium for the same. This is a small market and the demand fluctuates. But we are hopeful that the market will grow.

Which is the best suited bio refinery model for India to realize the sustainability goal? How can we build world class bio refineries in our country?

I hope we are working on demonstrating that. It is a model that works closely with farmers. In India, farmers have small land holdings. Any engagement has to help them be financially sustainable and for the farm to be productive in the short and longer term. We are working with our farmers to reduce their water footprint, and encourage the use of intercrops to reduce fertilizer use and give them a dual income. Similarly, biorefining is the process of converting the feedstock into value added products. These find applications in foods, fuels, electricity, chemicals, pharmaceuticals, fragrance chemistry, bio materials, agrochemicals and much more. There has to be a thinking towards a circular and cascading biorefinery that continuously strives to find and add value. A few years ago, we installed an incinerator boiler to recover energy from our waste. Now, we are implementing a process to extract potash from the ash from the incinerator. This potash will then be sold to our farmers. Currently, India imports almost all its potash needs. Through this example, we are showing how we can cascade and add value, and the process is circular. As a country, we need research to keep imagining the future. Research and practice go hand in hand. In Europe, I have seen large pilot plants where lab work can be taken further. We need to have such facilities to further bio-refining in India.

How supportive is the National Biofuels Policy towards setting up 2nd generation bio-refineries and what are the challenges that still need to be addressed?

The National Biofuel policy helps the making of biofuels. India is an agrarian economy and has an abundance of biomass. However, the collection of the biomass will always be a challenge. So the availability of this biomass at the processing site is an entry barrier. At Godavari Biorefineries, we have invested much in energy efficiency and engineering to make available surplus bagasse on site for use as a next generation feedstock. Secondly, ethanol from biomass is what is called 2-G (2nd generation). These are possible, and we are seeing demonstration facilities around the world. However, these are expensive and are made possible with Government support and subsidy. The Government of India is also supporting the creation of such Greenfield facilities to make 2G ethanol. But as in every other location, these facilities are very expensive. The Government makes them possible with ‘Viability Gap Funding’. I believe that India should also experiment with our own model. We need to encourage ‘bolt on’ solutions of adding equipment and technology to existing infrastructure. For example, our sugar mills already have biomass on site and downstream ethanol facilities. A ‘bolt on’ approach will only add what is necessary to complete the 2G addition, reducing funding needs. The current biofuel policy provides for viability gap funding only for Greenfield facilities. It needs to be modified for ‘bolt on’ facilities as well. In summary, I think India has a great agriculture base. There is lots of biomass and we have the education and research system to dream. The market is large and people are imagining a better and more sustainable future for their children. Biorefining of biomass is the way for a more sustainable way of life.

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