Economics

IIT has been researching several aspects of ethanol production and availability, and this article discusses the various possible routes to manufacture ethanol in the next 5-10 years.

Based on IIT’s analyses, the total cost of ethanol production from molasses works out to Rs 15.36 per liter based on the assumption that the plant will produce 60,000 liters of ethanol per day. The yield of ethanol is 205 liters per ton of molasses at a landed price of Rs 2,100/ton. Another source of ethanol is sugarcane juice, which can yield about 70 liters per ton. The cost of ethanol works out to be Rs 14.89 per liter (at a sugarcane price of Rs 800/ton).

An option would be to obtain ethanol from surplus molasses and sugarcane juice. This may be done at the cost of a marginal reduction in sugar production. Another option would be to increase the cultivation of sugarcane to the maximum extent possible with sufficient incentives to farmers. There may be some possibility in increasing the yield of ethanol from molasses through some R&D effort but there is limited scope in this regard.

In the US most of the ethanol is produced from corn. Yield of ethanol from corn is very high, about 400 liters per ton. The cost of producing ethanol, based on data obtained from US sources, works out to be Re 16.30 per liter (at a corn price of Rs 4,850/ton), which is only about Re 1 higher than that from molasses.

Consequently, IIT looked at the possibility of using damaged food grains (unfit for human and animal consumption) for the manufacture of ethanol. It is possible to set up two 60,000-liter per day plants in the north zone and one 60,000-liter per day plant in the east zone. This data is based on information received about the availability of damaged food grains in the zones. The cost of ethanol production, based on an ethanol yield of 360 liters per ton at a price of Rs 745/ton for damaged grains, works out to be Rs 6.27 per liter – the lowest cost for ethanol manufacture.

What is desirable is a more realistic estimate of the availability of damaged food grains. Based on officially available data, the quantity of ethanol that can be produced is extremely small. Biomass and municipal solid waste (MSW) are the lowest cost feedstock for producing ethanol. According to IIT’s estimate, if rice straw is used (at a cost of Rs 1000 per ton), it gives a yield of 250 liters per ton. The total cost of ethanol production works out to be Rs 23.64 per liter. This makes its cost the highest when compared to other raw materials. Further research in this area may make this technology cost competitive with ethanol from molasses.

Two promising routes for the manufacture of ethanol from biomass are enzymatic hydrolysis followed by fermentation, and gasification followed by fermentation. Of the two, the latter, namely synthesis gas fermentation technology, has the potential to be of lower investment with a lower operating cost than the former.

Instead of burning the rice straw in the fields, it can be converted to ethanol that may be able to meet the demand of fuel ethanol. The rice straw is converted locally into synthetic natural gas (SNG) and transported to a centrally located plant where the natural gas is converted to ethanol by steam reforming and fermentation. Since the technology for producing SNG and for the fermentation of synthesis gas is not yet available commercially in India, the government should encourage R&D activities in these two areas as they are abroad.

In conclusion, the following options may be taken up for the manufacture of ethanol commercially:

Near-Term Options (commercially applicable immediately):