F. No. 11/3/2021-(BP&E) Government of India Ministry of Consumer Affairs, F&PD Department of Food and Public Distribution Directorate of Sugar and Vegetable Oils Krishi Bhawan, New Delhi Date: 06.09.2022 OFFICE MEMORANDUM Subject: Meeting to discuss the issues relating to supply of ethanol for the current ESY 2021-22-reg The undersigned is directed to enclose herewith a copy of the minutes of the meeting held through VC on 25.08.2022 (Thursday) at 12:00 PM under the Chairmanship of Joint Secretary (Sugar) on the above cited subject. Encl: as above (Jitendér Juyal) Joint Director Tel: 011-23097059 To, 1. Cane Commissioner, Govt. of Uttar Pradesh, Maharashtra, Karnataka, Punjab & Haryana Excise Commissioner, Govt. of Uttar Pradesh, Maharashtra, Karnataka, Punjab, West Bengal & Haryana . Director, Bio Refinery, MoPNG Executive Director — BPCLIHPCL/IOCL . Executive Director, FCI DG -ISMA/ AIDA . MD, NFCSF nv Noose Copy to: 1. PPS to Jt. Secretary (Sugar) 2. PPS to Jt. Secretary (Refinery), MoPNGMinutes of the Meeting held through VC on 25.08.2022 (Thursday) at 12:00 PM to discuss the issues relating to supply of ethanol for the current ESY 2021-22 ‘A meeting chaired by Joint Secretary (Sugar) was held through VC on 25.08.2022 (Thursday) at 12:00 PM todiscuss the issues relating to supply of ethanol for the current ESY 2021-22. Deliberations held during the meeting are as under: 2s At the outset, Joint Secretary (Sugar) welcomed all the participants and he appreciated the efforts of all stakeholders for achieving the target of 10% blending in May 2022 much ahead of the targeted timelines of November, 2022. But he also expressed the concern over recent drop in blending percentage from 10.17 % on 17.07.2022 to 10.11 % on 14.08.202 and advised the distilleries to increase the ethanol supply so that blending of 10 % could be maintained throughout the year. 3. In response, some suppliers from the State of Uttar Pradesh have informed that the State Government has hiked the molasses reserved quota from 18% to 20% with retrospective effect to maintain adequate supply of molasses for distilleries to produce country made liquor, which in tum will affect the ethanol supply under the EBP Programme. The representative from the State Government informed that the decision was taken in the backdrop of some major groups of Uttar Pradesh which are not maintaining the reserved quota and not providing the sufficient molasses for liquor production. 4, The sugar millers have expressed concern over this hike in the reserved quota claiming it would not only impact their cash flow but also freeze the availability of molasses towards ethanol making for mixing in petrol. State officials informed that the State Government is considering to waive off the retrospective condition; reconciliation is being done by the Excise Department and informed that 20% quota will be there but retrospective condition could be waived off. 5. __In context of ethanol supply in the balance period of current ESY, Additional Chief Secretary, Sugar Industry & Cane Development and Excise, Govt. of Uttar Pradesh informed that a meeting will be convened in coming 2-3 days between all the sugar millers and distillers who are producing ethanol and issues related to Molasses reservation and TPA will be discussed and will be resolved in the meeting so that EBP Programme does not suffer and contracted quantities of the suppliers of Uttar Pradesh will be supplied. 6. Giving the current scenario of blending across the country, OMCs informed that to achieve 10% blending in current ESY, they have to maintain blending percentage more than 10% in the balance period of current ESY and 7 cr litres of ethanol per week ‘supposed to be blended ; now looking at the current situation, the supply has come down to 6 cr Itrs per week and it is assumed that it would further come down so OMCs need miniumum 7 cr Itrs of ethanol per week to sustain 10 % blending for the balance period.7. OMCs further informed that, looking at the average 10% ethanol blending at pan India level, about 125 cr Itrs of ethanol would be required on the basis of contacted quantity, out of this 95 cr Itrs from molasses route , 10 cr Itrs from sugar syrup route and about 20 cr Irs from grain route . It is clear that lot of dependence is on the supplies from Sugar part. In terms of daily receipts, ethanol supplies have come down to about 0.82 or ltrs ; to get 125 cr Itrs, around 1.25 cr Itrs per day would be required. JS (Sugar) advised OMCs to share the list of defaulters so that a meeting may be convened state wise with all these distillers . OMCs advised that early onset of crushing will help in meeting the target as the balance contracted quantity is mostly from sugar route. OMCs have been floating cycles for procuring ethanol , Cylce C10 is over and C11 cycle will be floated in first week of September. OMCs advised that the suppliers who are ready to supply ethanol from 15" October, can participate in the next cycle. 8. JS (Sugar) also directed OMCs to provide information related to distillery wise contracted quantity for Q4 so that detailed state wise review meetings with both grain and molasses based distilleries may be held to review the status of supply of ethanol in balance period of current ESY. 9 JS (Sugar) advised States that crushing for next season could be started little early so that the enough supply of ethanol from sugar part in October & November could complete the short fall and may help in maintaining the target of 10% in remaining months.In response, Additional CS, Govt. of Uttar Pradesh informed that the state is planning to crush sugarcane in Western UP from 15" October, Central UP from 25” October and in Eastern UP from 5" November. Representative from Cane Commissioner Office, Govt of Maharashtra informed that crushing will start in the first week of October. 10. _In context of shortfall in ethanol supplies from suppliers, ISMA informed that molasses based distillers have already supplied about 75% of their contracted quantities til 15.8.2022 and still impressing upon each distillery to complete their contracted supply; some distilleries due to monsoon have stopped their operation in absence of incineration boilers. 11. __ MD, NFCSF also informed that a total of 16 plants (7 green field & 9 expansion) are under commissioning; total capacity of 29 cr Itrs will be generated by them. In current ESY, out of total 30.92 cr Itrs of allocated quantity to Cooperative Sugar sector , about 29 cr Itrs have already been supplied to OMCs for blending, 12. Representative from AIDA informed that shortfalls in supply from grain route are due to the following reasons; i) ___ Fuel prices viz. rice husk, coal and other agriculture residues have gone up drastically and the export of large amount of grain have increased the price of grain , at this situation it is not viable for grain based distillers to produce ethanol. ii) _ New distilleries are not starting their operations due to current scenario of raw materials and fuel situation across the country.iii) In some areas, there is delay in procuring of FCI rice on time, that is also adding to the shortages and delay in supply ethanol from rice. 13. In context of higher price of DFGs, JS(Sugar) advised AIDA to go for FCI rice and make a plan with FCI for seamless supply of FCI rice. He also advised FCI officials, that instead of moving FCI rice through railway rakes to godowns, hand over the same to suppliers at railway points. 14. An official from FCI gave a review of the lifting of FCI rice for production of ethanol in current ESY. He informed that out of total allocated quantities of FCI rice, lifting is just about 36 % so far and there are also some distillers who have lifted just meagre quantites like 15 % , 8 % and even 1.5 % of their contracted quantites. In current ESY, only about 3 months are left, and FCI still have more than 60% of rice to be lifted by the grain based distillers. 15. AIDA requested to OMCs to relook at costing of ethanol in Q4 and provide additional relief as there are dedicated ethanol plants which are not running due to the non-availability of raw materials and higher fuel prices. JS (Sugar) also requested OMCs that revision in prices of ethanol produced from DFG and FCI Rice are the main issue which need to be resolved soon in order to avoid the impediments in ethanol supply for meeting the blending targets. 16. JS (Sugar) also suggested that non-supply of the blended fuel from next year will attract a duty of Rs. 2fitre and which is to be paid by the consumers. It may cause hue & cry from the public side. It is advised that both industries (sugar & grain) to continue the supply of ethanol throughout the year during crushing season as well as non-crushing season. 17. At the end of the meeting, a representative from M/s EID Parry has informed that the plant has already exhausted all the molasses available for production of ethanol. In this regard, the PP has informed that a company namely Mis Tata Chemicals have purchased their sugar for making chemical products and they have producing sugar residue as a by- product. About 3000 MT of sugar residue is available with M/s Tata Chemicals from which about 10 Lakh Litres of ethanol can be produced. They informed that they are ready to supply ethanol from this product at C-Hy price. 18. Director (sugar) informed that the matter has already communicated to MoPNG. OMCs were requested to look into the matter of purchasing ethanol derived from sugar residue provided by M/s Tata Chemicals and any other such sugar residue at the price of ethanol produced from C-Hy molasses. 19 At last, JS(Sugar) advised all the distillers that all contracted quantity of ethanol must be completed in time and early crushing should be started so that sugar mills can supply ethanol in October & November and the 10 % blending of ethanol would be maintained in the balance period as the EBP Programme is being monitored at the highest authority level The meeting ended with vote of thanks to the chair.List of participants Shri Sanjay Bhoosreddy, ACS, Sugar Industry & Cane Development and Excise , Govt. of Uttar Pradesh Shri Subodh Kumar Singh, Joint Secretary (Sugar), DFPD Shri Sangeet, Director (Sugar) Shir Asheesh Joshi, Director (Bio Refinery), MoPNG Shri Jitender Juyal, Joint Director, DSVO Shri Kanav Dua, Deputy Director (Cost), DSVO Shri Anurag Saraogi, Chief General Manager, BPCL . Shri Sridhar Goud, ED, HPCL .. Shri Saurabh Banerjee, Chief General Manager, IOCL 10. Shri V. N. Raina, DG, AIDA 11.Shri Prakash Naiknavare, MD, NDCSF 12. Shri G. K. Thakur, Representative from ISMA 13. Representative from FCI 14. Representative from Cane Commissioner Officer Maharashtra 15. Shri Sanjay Guptara, Secretary General, UPSMA 16. Shri Ajit Chougule, Executive Director, WISMA 17. Representative from Sugar Mills & Distilleries ©CONODRYON