Introduction

The Pradhan Mantri G-WAN (Biofuels-Environmentally Friendly Crop Waste Reduction) scheme launched in March 2019 aims to support the setting up of second generation (2G) ethanol projects using lignocellulosic biomass and other renewable feedstocks. As of September 2023, Rs 880 crore has been sanctioned for various 2G ethanol projects, which will augment the availability of ethanol for the ethanol blending petrol programme and reduce dependence on fossil fuel imports

What is PM JI-VAN Scheme?

• Definition and Full Form: Pradhan Mantri G-VAN (Jeevan Fuel- Paryavaran Anuksha Fasal Vinash Nivaran) Yojana is a government initiative that aims to provide financial assistance for integrated bio-ethanol projects that use lignocellulosic biomass and other renewable feedstocks.
• Launch Date and Objective: The scheme was launched in March 2019 with the primary objective of promoting the establishment of second generation (2G) ethanol projects. These projects aim to increase the production of bio-ethanol, thereby reducing environmental pollution and supporting the Ethanol Blended Petrol (EBP) programme.
• Financial Outlay: The total financial allocation for the scheme is Rs 1969.50 crore for the period 2018-19 to 2023-24. The funds have been distributed to support 12 commercial projects and 10 demonstration projects, with specific allocations for each type of project and administrative expenses.

Objectives of the PM JI-VAN Scheme

Primary Goals

• Promoting 2G Ethanol Production: The scheme aims to establish an ecosystem for setting up commercial projects and promote research and development in the second generation (2G) ethanol sector.
• Environmental benefits: It seeks to reduce greenhouse gas emissions by replacing fossil fuels with biofuels, thereby contributing to India’s climate goals.
• Preventing biomass burning: By using agricultural residues and other waste materials, the scheme aims to prevent the burning of biomass, which is an important source of air pollution.
• Support Ethanol Blending Programme (EBP): The scheme is designed to increase the availability of ethanol for blending with petrol, thus reducing the country’s dependence on fossil fuel imports.

Economic and Social Objectives

• Increased Farmer Income: By providing a market for agricultural residue, the scheme aims to increase farmers’ income and reduce the practice of crop residue burning.
• Creating Employment Opportunities: The establishment of 2G ethanol projects and related biomass supply chains is expected to generate employment in rural areas.
• Promoting Swachh Bharat Mission: The scheme contributes to the Swachh Bharat Mission by using waste biomass and urban waste, thereby promoting sanitation and waste management.

Technological Advancement

• Promoting R&D: The scheme encourages research and development in 2G ethanol technologies, aiming to make these technologies commercially viable and scalable.
• Development of Indigenous Technologies: It supports the development of indigenous technologies for conversion of biomass into ethanol and reduces dependence on imported technologies.

Project Details and Progress of the PM JI-VAN Scheme

Funding Details

• Maximum Financial Support: The scheme provides financial assistance up to a maximum of Rs 150 crore per commercial project and Rs 15 crore per demonstration project to enhance commercial viability and promote research and development in 2G ethanol technologies.
• Total Allocation: The total financial outlay for the scheme for the period 2018-19 to 2023-24 is Rs 1969.50 crore. This includes Rs 1800 crore for 12 commercial projects, Rs 150 crore for 10 demonstration projects and Rs 19.50 crore for administrative charges of the Centre for High Technology (CHT).

Implementation Agency

• Centre for High Technology (CHT): CHT, a technical body under the Ministry of Petroleum and Natural Gas (MoP&NG), is the designated implementing agency for the scheme. It is responsible for overseeing the execution of projects and ensuring compliance with scheme guidelines.
• Scientific Advisory Committee (SAC): The SAC of the Ministry of Petroleum and Natural Gas is the nodal body for recommending eligible projects. It reviews the proposals submitted by the project developers and makes recommendations to the Steering Committee of MoP&NG for approval.

Project Approval and

• Submission of proposals: Project developers desirous of availing benefits under the scheme will have to submit their proposals to the CHT. These proposals are reviewed by the SAC based on specific selection criteria.
• Approval process: The projects recommended by the SAC are approved by the Steering Committee of the Ministry of Petroleum and Natural Gas headed by Secretary, Ministry of Petroleum and Natural Gas. The approved projects receive financial assistance in phases based on achievement of predetermined milestones.
• Monitoring and evaluation: The progress of each project is monitored by the CHT. Funds are released in phases based on successful completion of project targets. Ministry of Petroleum and Natural Gas reviews periodically to ensure that projects are on track and meet their objectives.

Approved Projects

• Commercial projects: Six commercial second generation (2G) bio-ethanol projects have been approved under the PMG-One scheme. These projects are located in Punjab, Haryana, Odisha, Assam and Karnataka.
• Demonstration projects: Two demonstration projects have been sanctioned, one each in Haryana and Andhra Pradesh.

Project Status

• Panipat, Haryana: The commercial project at Panipat has been completed and is dedicated to the nation. This is an important milestone in the implementation of the project plan.
• Bathinda, Punjab: The commercial project at Bathinda is in an advanced stage of construction and is expected to be commissioned soon.
• Bargarh, Odisha: The project at Bargarh is also progressing well and is in advanced stages of construction.
• Numaligarh, Assam: The Numaligarh project is likewise in an advanced stage of construction, which is expected to be commissioned in the near future.

Benefits and Impact of the PM JI-VAN Scheme

Environmental Benefits

• Reduction of greenhouse gas emissions: The scheme aims to reduce greenhouse gas emissions by promoting the use of biofuels, which are clean alternatives to fossil fuels. It contributes to India’s climate goals and helps mitigate climate change.
• Prevention of biomass burning: By using agricultural residues and other waste materials for ethanol production, this scheme helps in preventing the burning of biomass, which is an important source of air pollution. This improves air quality and public health.

Economic Benefits

• Reduction in Import Dependence: The scheme supports the Ethanol Blended Petrol (EBP) programme, which aims to reduce India’s dependence on imported crude oil by replacing it with domestically produced ethanol. It helps in achieving foreign exchange savings and enhances energy security.
• Increased farmer income: By providing a market for agricultural residue, the scheme provides an additional source of income for farmers. It helps in improving their economic condition and reduces the practice of burning crop residue.
• Creation of Employment Opportunities: The establishment of 2G ethanol projects and associated biomass supply chains is expected to create employment opportunities in rural and urban areas. This includes jobs in the collection, transportation, and processing of biomass.

Social Benefits

• Improving Public Health: By reducing air pollution caused by biomass burning, the plan contributes to better public health outcomes. This includes a reduction in respiratory and other pollution-related diseases.
• Contribution to Swachh Bharat Mission: The scheme supports the Swachh Bharat Mission by promoting the use of waste biomass and urban waste for ethanol production. It helps in waste management and contributes to sanitation and hygiene efforts.

Technological Advancement

• Promoting 2G ethanol technologies: The scheme encourages research and development in second generation (2G) ethanol technologies, making them commercially viable and scalable. This includes development of indigenous technologies for conversion of biomass into ethanol.
• Support for Innovation: The scheme promotes innovation in the biofuel sector by providing financial assistance and creating a conducive environment for 2G ethanol projects. It helps in the development of new technologies and processes for efficient ethanol production.

Poli6cy and Regulatory Support in the PM JI-VAN Scheme

Government Initiatives

• National Policy on Biofuels: The PMG-WAN scheme is aligned with the National Policy on Biofuels, which aims to promote the use of biofuels in the energy and transport sectors. The policy provides a framework for the production, use and promotion of biofuels, including ethanol.
• Ethanol Blending Programme (EBP): The scheme supports EBP, which mandates blending of ethanol with petrol to reduce the country’s dependence on fossil fuels. The government has set a target to increase the ethanol blending percentage with a target to achieve 20% blending by 2025.

Financial Incentives

• Excise and GST: To incentivise the production and use of 2G ethanol, the government has imposed additional excise duty on non-blended fuels. Additionally, the Goods and Services Tax (GST) rate on ethanol for blending with petrol has been reduced to 5%.
• Subsidies and grants: The scheme provides financial assistance in the form of subsidies and grants to support the setting up of 2G ethanol projects. This includes funding for both commercial and demonstration projects to promote the adoption of advanced biofuel technologies.

Regulatory Measures

• Ethanol Purchase Agreement (EPA): Oil Marketing Companies (OMCs) are required to enter into long-term ethanol purchase agreements (EPAs) with ethanol producers. These agreements provide offtake assurance for 15 years, ensuring a stable market for ethanol produced under the scheme.
• Feedstock diversification: The policy encourages the use of diverse feedstocks for ethanol production, including agricultural residues, municipal solid waste, and other renewable materials. This helps in ensuring a continuous supply of raw materials for 2G ethanol production.

Research and Development Support

• R&D funding: The scheme allocates funds for research and development in 2G ethanol technologies. This includes pilot projects, demonstration plants and support for development of indigenous technologies for conversion of biomass to ethanol.
• Collaboration with research institutions: The government promotes collaboration between industry and research institutions to pursue the development of 2G ethanol technologies. This includes partnerships with universities, research laboratories, and international organizations.

Challenges and Future Prospects of the PM JI-VAN Scheme

Challenges

Feedstock Supply Chain

• Inefficient collection and transport: The supply chain for biomass feedstock is inefficient, including challenges in collection, aggregation, transportation, and storage. This inefficiency increases the overall cost of production.
• Regional concentration: The production of bioethanol is very concentrated in some regions, leading to non-uniform availability across the country. This regional disparity complicates logistics and increases transportation costs.

Technological and Financial Barriers

• Nascent Technology: The technology for 2G ethanol production in India is still in its early stages, leading to issues of high production costs and financial viability. Extensive research and development is required to make these technologies more cost effective.
• High Capital Investment: Setting up 2G ethanol plants requires significant capital investment, which is a challenge for many potential investors. Financial stability of major domestic suppliers such as sugar mills is also a matter of concern.

Regulatory and Policy Issues

• Inter-State Movement of Ethanol: Only 14 states have implemented the amended provisions of the Industrial Development and Regulation Act, which facilitates inter-state movement of ethanol. This lack of uniform implementation hinders the efficient distribution of ethanol across the country.
• Environmental clearance: Ethanol production plants fall under the “red category” and require environmental clearance under the Air and Water Acts. This process can be time-consuming and delay the installation of new plants.

Future Prospects

Expansion of Production Capacity

• Increase in Ethanol Production: To achieve the target of 20% ethanol blending by the year 2025, India needs to significantly increase its ethanol production capacity. This includes both sugarcane-based and grain-based ethanol production.
• Use of Wasteland: A large part of India’s land area is barren land, which can be used for the cultivation of energy crops like Napier grass and bamboo. It can provide a sustainable source of biomass for ethanol production.

Policy and Financial Support

• Increase in Budgetary Allocation: There is a need to increase the budgetary allocation under PM JI-VAN Yojana and include more biofuel projects under its ambit. Extending the scheme deadline beyond 2023-24 could also support the nascent biofuels sector.
• Production Linked Incentive (PLI) Scheme: The inclusion of biofuel projects under the PLI scheme can provide incentives based on sales, performance criteria and local value addition. This can improve project viability and attract large-scale investment.

Technological Advancements

• Research and Development: Continued investment in R&D is critical for the development of cost-effective and efficient 2G ethanol technologies. Cooperation between industry and research institutions can accelerate technological progress.
• Single Window Clearance: Implementing the single window clearance system for new and expansion projects can expedite the approval process and reduce delays in setting up ethanol production plants.

Environmental and Economic Benefits

• Reduction of Greenhouse Gas Emissions: Increasing the production and use of 2G ethanol can significantly reduce greenhouse gas emissions, contributing to India’s climate goals.
• Energy Security and Rural Development: Increasing ethanol production can reduce dependence on imported crude oil, improve energy security, and create employment opportunities in rural areas, thereby supporting economic growth.

Conclusion

Pradhan Mantri JI-VAN scheme is an important initiative aimed at boosting the production of second generation (2G) ethanol, thereby reducing India’s dependence on fossil fuels, enhancing energy security and reducing environmental pollution. By promoting the use of agricultural residues and other renewable feedstocks, the scheme not only supports the Ethanol Blended Petrol (EBP) programme but also contributes to rural development and public health reforms