Straight -Talk with Tarun Sawhney, Vice Chairman and Managing Director, Triveni Engineering & Industries
In our Straight-Talk series we speak with Tarun Sawhney, Vice Chairman and Managing Director, Triveni Engineering & Industries Limited sharing his thoughts.
As acceptance of EVs is growing worldwide, don’t you think it will impact the supply of ethanol to the OMCs?
We believe when it comes to India, given the higher proportion of freight vehicles and availability of power, EVs will largely be an urban solution. Thus, we expect the demand for petrol and diesel to be relatively resilient. In turn, the demand for ethanol will remain strong as the country has laid aggressive targets of 20% of ethanol blending with petrol by 2025. We believe in due course the Government will guide for blending targets beyond this, keeping the ethanol demand progressively higher.
Already, the production in the first nine months of this season has surpassed the total ethanol production of last season which was 302 crore litres. Ethanol supplies to OMCs in the country reached 313 crore litres till August. India has achieved the target of supplying petrol mixed with 10% ethanol ahead of schedule in June this year. Originally blending petrol with 10% ethanol was a target scheduled for November this year. Additionally, during the previous quarter, the OMCs have declared monetary relief on dispatch of Ethanol for supplies made between June 1, 2022, to Nov 30, 2022 ranging from ₹ 1,179 to ₹ 2,337 per kilo liter depending on the feedstock. This is to compensate for high energy costs and to boost biofuel production. This is in addition to declared Ethanol prices, which suggests OMCs are keen to procure ethanol at attractive prices. Thus, we believe rising penetration of EVs will not dampen the overall ethanol supply to OMCs.
How much ethanol is supplied by TEIL to OMCs?
At Triveni, we have been increasing our overall distillation capacity materially in the last couple of years and have announced further expansions as well. For FY22, the overall alcohol produced for the Company was ~10.7 crore litres, with a distillation capacity of 320 KLPD in the year. In the current fiscal year, we are looking at much higher production levels of ~18 crore litres,as we have increased distillation capacity further and are currently at 660 KLPD. The Company has further announced expansion of capacity to 1110 KLPD by Q3 FY 24 and thus expected production to increase to ~25 crore litres in FY24 and at annual run rate of 32 crore litres beyond that. Majority of the spirit production is ethanol which is supplied to OMCs.
How do you think ethanol blending in petrol is benefiting the country?
Immense benefits can accrue to the country by 20% ethanol blending by 2025, such as saving INR 30,000 crore of foreign exchange per year, energy security, lower carbon emissions, better air quality, self-reliance, use of damaged food grains, increasing farmers’ incomes, employment generation, and greater investment opportunities.
How is the Government supporting ethanol producers in India?
The Centre is taking several steps for diversion of sugar to ethanol.The Government has announced the doubling of incentive on sugar sacrificed for producing ethanol from B-heavy molasses/sugarcane juice/sugar syrup/sugar in October of last year. The Government is also looking at innovative engines that will make adoption of flex fuel vehicles much more efficient and in turn increase the demand of ethanol, hence opening greater profit avenues for the ethanol producers.Seeking a permanent solution to address the problem of excess sugar, the Government is encouraging sugar mills to divert excess sugarcane to ethanol.
