India is the fourth largest producer of ethanol in the world, producing it primarily through the fermentation of molasses, a byproduct of sugarcane processing. Sugarcane production is concentrated in certain states like Uttar Pradesh, Maharashtra, and Tamil Nadu. In order to increase ethanol production, the Indian government is providing subsidies and mandating blending quotas. Sugar companies are expanding ethanol production capacity by building 30 new ethanol plants in 2007 with the goal of using more sugarcane directly for ethanol production rather than relying on molasses.

1. Ethanol Production in India Business Circles

2. India: Ethanol Production Process India is the fourth largest ethanol producer after Brazil, the United States and China. Ethanol is produced by the fermentation of molasses

3. India: Sugarcane Production Sugarcane is the key raw material for producing sugar 10-12 month crop planted during January to March 4.36 Mha of land under sugarcane cultivation, with a cane output of about 310 Mt per year The sugarcane growing areas are broadly classified into two agro-climatic regions, viz. sub-tropical and tropical. Sugarcane is being cultivated throughout the country, except in certain hilly tracts such as Kashmir and Himachal Pradesh Sub-Tropical Tropical Uttar Pradesh (UP) Uttaranchal Bihar Punjab Haryana Maharashtra Andhra Pradesh (AP) Tamil Nadu (TN) Gujarat

4. India: Sugarcane Production Sugarcane production in different Indian states: 2001-2006 Sugarcane production in India is forecasted to reach 330.3 million tons in fiscal 2007-08 at a CAGR of 7.15% States 2001 2002 2003 2004 2005 2006 Andhra Pradesh 17.69 18.08 15.39 15.07 15.74 17.94 Gujarat 12.7 12.47 14.07 12.67 14.57 13.31 Haryana 8.17 9.27 10.65 9.28 8.06 6.84 Karnataka 42.92 33.02 32.49 16.02 14.28 15.2 Maharashtra 49.59 45.14 42.17 25.67 20.48 34.69 Tamil Nadu 33.19 32.62 24.17 17.66 23.4 33.3 Uttar Pradesh 106.07 117.98 120.95 112.75 118.72 121.53 Uttaranchal 7.35 7.56 7.33 7.65 6.44 6.13 Punjab 7.77 9.25 9.29 6.62 5.17 5.29 Others 10.51 11.83 10.89 10.48 10.25 12.65 Total 295.96 297.22 287.4 233.87 237.11 266.88

5. India: Ethanol Production In India, ethanol is produced by fermentation of molasses, a by-product of sugar 88 lbs of molasses is produced from one ton of cane, from which about 10 liters of ethanol can be obtained If the sugarcane is directly and fully used in ethanol manufacturing, the yield of ethanol is 70 liters/ton In addition to the existing 10 ethanol facilities, Indian sugar producers to build 30 new ethanol plants in 2007 India presently has 2,900 ML ethanol distiller capacity Number of Facilities Capacity(ML) State 11 75 Uttar Pradesh 7 62.5 Tamil Nadu 8 66.5 Karnataka 4 40 Andhra Pradesh New Ethanol Facilities

6. Developments for Ethanol from sugarcane Birla group to invest US$187 mn to in sugar and ethanol output Indian sugar industry is expanding capacity to 22.5 MT following prospects for sale of ethanol and cogeneration of power Farmers in Uttar Pradesh planted sugarcane in 25% more fields DSCL is setting up a sugar plant with a capacity of 4,000 tons of crushed cane/day plant. The project will envisages a 60 KL/d ethanol distillery. Reliance Industries to erect a 195 Ml/year ethanol plant to meet its needs for the production of monoethylene glycol (MEG The demand for potable ethanol and industrial ethanol is expected to grow annually by 3% and 3.5%, respectively

7. Government Mandate For Ethanol The government decided to amend the Sugar Development Fund Act, 1982 enabling financial assistance for production of ethanol and co-generation of power from bagasse The government is examining various other options to provide concessions/exemptions to sugar and oil industries. Allow oil companies to receive and unload Anhydrous Ethanol without the presence of State Excise Officials. In January 2003, the government launched a program to mandate the blending of 5% ethanol in gasoline in 9 states and 4 union territories.

8. Government Mandate For Ethanol Petroleum Ministry to implement the second stage of the ethanol program, which aims to supply ethanol-blended gasoline across the country, beginning the 2006/07 sugar marking year. In the third stage, the plan is to increase the ethanol-blending ratio from 5% to 10% The government-owned Sugar Development Fund is offering subsidized loans up to 40% of the project cost for setting up ethanol production facilities (using molasses and sugarcane) The Indian government and IOC has signed a memorandum of understanding to expand its presence across the entire hydrocarbon value chain, including the refinery and pipeline sectors, and to boost the use of ethanol in gasoline by 10%

9. A Ravi Vishnu Presentation