In this episode on ethanol blending in gasoline, focusing on the case of India, SGS INSPIRE senior market analyst, interviews Dr. Ramakumar, former R&D Director and Board member of Indian Oil.

Together, they explore the reasons for India’s decision to start blending ethanol in gasoline in 2003, following Brazil’s path. They discuss the current level of ethanol in India’s gasoline and the feasibility of India’s target for an average of 20% of ethanol penetration by April 1, 2025.

They also look into the various ethanol feedstocks available to India, the domestic ethanol production and other types of innovative blending with gasoline, namely the methanol-gasoline blend which is under testing in some Indian states.

Hello everyone, my name is Lucky Nurafiatin, I am the market analyst for Asia Pacific for SGS Inspire. Welcome to the INSPIRE-ing energy talks, SGS Inspire is market intelligence subscription-based service of the SGS Group. We profile regulatory and market analysis on conventional and alternative fuels that includes biobased fuel, gaseous fuel, synthetic fuel and exhaust emissions regulations. In this episode on ethanol blending specifically India’s ethanol blending. I have Dr SSV RamaKumar with me, Dr RamaKumar holds a doctorate in chemistry from IIT Roorke and is the former director of (R&D) Indian Oil Corporation. He has 55 years of experience in lubricant technology, refinery processes and catalyst developing. Doctor RamaKumar also was pioneering various alternative energy programmes including waste to energy, bioenergy, solar, energy storage and hydrogen strategy, to name a few. He published more than 150 research journals and holds many patents. That is impressive. Hello, Dr Ramkumar, thank you for being here with me. It's been a long time since we met and had a conversation. How have you been?

Well, Lucky I think I'm happy to meet you again on this platform. Of course, these are early days of superannuation for me only last month I dedicate the office from Indian Oil R&D Centre after having served the seven years on the Board of Indian Oil as Director R&D. Before I pick up the new assignment, I'm here with you today.

Thank you. Wonderful. About India ethanol blending, I understand that Brazil started with commercial ethanol blending gasoline in the 1970s in response to the sudden increase in crude oil prices as well as to reduce the country's dependency on imported gasoline. The fact that Brazil is one of the major ethanol producers has a significant influence on this decision. The U.S. is also a major ethanol producer. Both Brazil and the US, they take turns as the world's biggest ethanol producers. Ethanol is also blended with gasoline in the U.S. In fact, the US started adding ethanol as an open booster in the 20s and 30s and after that, ethanol was in high demand during World War Two to increase the fuel supply because there was a fuel shortage in the US. In the 70s, the US started with commercial ethanol blending gasoline for the same reason as Brazil. The crude oil price was too expensive. When environmental concerns resulted in the removal of lead from gasoline, I think you might be aware of it, and this too increases the need for ethanol as an Octane booster. By using ethanol as an oxygenate, carbon monoxide emissions can be controlled. Now India follows the steps. So, what are the reasons or drivers for this economy blending in India and why ethanol and not other types of alcohol?

Yes. it's good. The Indian economy story is very much akin to the Brazil one and the reasons are also pretty the same. You know that India is majorly an oil importing nation and 80% of our energy needs, we are dependent on imports from Middle East and from many other oil producing nations. The main driver for us to start adding up our blending in gasoline is to reduce those imports. To start with by blending some oxygenate which would be easily feasible and which will not hamper the performance of gasoline in the automobiles. When we scouted for this, it can fix the bill and for India to go whole hog behind ethanol, there is some other reason also. Because we are also a major agrarian economy and the main crops in India are rice, that is Paddy, wheat and to a great extent sugarcane. These are the real feedstocks through which one can produce ethanol. Ethanol is also being seen as an additional revenue for the Indian farmers to raise their income. In a way, it’s a politically correct campaign to give a boost to the agrarian economy and to raise the standards of the farmers. Both reasons gel well with the policymakers of the Government of India and that's how there is a preponderance for ethanol as a blending oxygenate for gasoline. You ask me a question. It's a very good question. Why not other alcohols? In fact, when I was director, R&D. The highest Planning Commission, planning the organisation of the country, the government, what we call NITI Aayog, it sets the policies in a packet of five years, we call five-year plan. NITI Aayog entrusted that job on under my conservatorship to look for methanol. Why not methanol to be a blending oxygenate? The reason for that is Indian coal, coal available in the country is a very high ash containing coal and its combustion efficiency is not all that good, unless you mix it with low ash containing coal. For low ash containing coal, again, we would be dependent on imports because it’s not available in our country in great abundance. To convert with a naturally occurring high ash containing coal through gasification route and produce methanol because coal gasification, the easiest product that one can produce is ethanol rather than methanol, rather than C2, C3, C4 as you go up the carbon ladder, I think it will be tougher chemistry wise. That's why with methanol there was some interest, but methanol is more challenging an oxygenate to blend with gasoline. It is highly polar; it is one carbon atom. The miscibility and the stability of methanol in gasoline is much tougher compared to blending ethanol and higher alcohols in gasoline. While some efforts are still going on to use methanol to blend with gasoline, majorly the country is now behind ethanol.

I see. I will be coming back to that methanol question a little later, but that's an interesting background of choosing ethanol. When did India start blending ethanol into gasoline?

There's a very good story of ethanol blending. It's a good case study for any other country, which is freshly thinking of using an oxygenate - ethanol in gasoline. When we started way back in 2003, at that time the initial mandate was to blend 5% of ethanol in gasoline. Majorly, the ethanol production in our country is by fermentation of sugarcane molasses. There was no other technology to convert any other feedstock into ethanol. So, against the five percent mandate we were doing the additional percentages of half a percent or 1% for a long time. Then there were some restrictions, India is a very vast country, maybe in certain pockets where sugarcane production is high, you can still produce ethanol, but there are certain geographies within the country where sugarcane production is not there, there were restrictions to move ethanol from one state to the other state for quite a long time in the country. All these limitations really held us back even to achieve 5% of ethanol till almost the 2008 and 2009. In 2009 or 2010, we started working on raising the ethanol blending percentage because policymakers said that they would like to ease out free movement of ethanol from one part to the other part of the country.

That's interesting, because I only found in India that there's a restriction between states of the movement of ethanol.

Not anymore. When everybody recognises, the industry recognises, the automobile industry recognise, the oil and gas industry recognises that this is one real impediment that there are certain states where huge surpluses of ethanol is there, there are some northeastern states of the country where there is not even a single drop of ethanol because sugarcane is not a crop to be produced there. Somewhere in like 2014 or so, these restrictions were taken off and freely ethanol can be moved from an ethanol surplus state to ethanol deficient state. So that on PAN India basis ethanol availability can be improved. That's how in 2015 and 2016, our blending percentages started rising and I think for the first time in 2018 and 2019, we achieved as a nation on PAN India basis 10% ethanol blending in the entire gasoline.

Oh wow, so the penetration of ethanol reaching 10% on the average in the whole country. After more than two decades of adding ethanol to gasoline, what is the average percentage of ethanol in India's gasoline at present. Speaker 2 - Dr SSV Ramakumar Right now, we are doing in excess of 10% on PAN India basis, certain states they are doing national average around 12% today 11.7 to 12.7%. In 2021, our Honorable Prime Minister, Sri Narendra Modi, he has given a road map for ethanol blending in the country. Originally, we were to raise the percentage by 2030 to 20%, but after seeing the success in 2018 and 2019 he advanced the target of blending 20% by 2025. Now the new target for the nation is by 2025 on PAN India basis, the entire country will be running on 20% ethanol blended gasoline. Right now, as I'm speaking to you, 1900 retail outlets on PAN India basis have already started dispensing E20. That is 20% EBP in 1900 Retail outlets of various state-controlled oil marketing companies. I must tell you about this change, while we were singularly dependent on only sugarcane molasses to producing ethanol, our government took lot of initiatives to enhance and expand the feedstock base of ethanol production. So all the agricultural produce were pressed into producing ethanol by second generation ethanol producing technologies like rice straw, wheat straw, cotton straw, any ways to convert waste to cellulosic ethanol and the government has put up lot of financial incentives for anybody who would like to use those second generation feedstocks, cellulosic, lignocellulosic feedstocks, then some viability gap funding was made available from the country for those private entrepreneurs to set up those kind of plants. The technology also has some of the age to convert this kind of agri residues into ethanol. For example, Indian oil, my previous company till last month, it is the largest Indian oil and gas company, has commissioned a second-generation ethanol plant where 800 metric ton of rice straw is every day getting converted into ethanol. Which is around 100 kiloliters of ethanol every day. This is this is Asia Pacific’s largest second-generation ethanol plant today operating in one of our refinery locations.

I jump a bit to continue with the cellulosic ethanol that you mentioned. You produce ethanol from sugarcane juice and molasses, and then you also produce from grains. A couple of cellulosic ethanol. Also, the plants are coming as well. Is there a significant difference in the production costs between the conventional ethanol production technology and then the cellulosic ethanol technology. The ethanol producer is the same. So how will India bridge this cost gap and take the cellulosic ethanol side by side with the conventional ethanol. Because I understand ethanol in India is the price is set by the government? How do you think it will be bridge?

It's a very good question and a topical question. I mean when you talk about second generation ethanol production pathways, the technologies are still not mature. First of all, in any second-generation ethanol technology, it proceeds by three major steps. The pretreatment of the agri residue, hydrolysis of the sugars and then finally the fermentation produces the ethanol. The hydrolysis step requires enzyme, this is majorly enzymatic hydrolysis process, and the pretreatment requires large amounts of acid and base. Depending on the technology pathway that one selects. In spite of this, there is all over the world for second generation pathways are just 27%. To put it in perspective, for one ton of feedstock, you get only 270 litres of it and a major byproduct is lignin. Lignin is a byproduct which requires lot of alternative treatment path. You are asking a question, how you're going to bridge this cost efficiency, difference in cost efficiency in first generation and second generation. Right now, the enzyme is the most cost intensive component of the entire process, and it is being imported today and only one supplier in the entire world is producing that enzyme. So, most of the Indian researchers and Asian researchers are concentrating on Indigenous development of this enzyme, which accounts for 30 to 40% of the revenue expenditure of running these plants. My R&D centre under my stewardship, we could be able to develop an indigenous enzyme, and which was scaled up to almost 5000 litres. So, our next plans which we are going to set up for second generation pathways, they will be employing indigenous enzymes, thereby reducing the cost by 30 to 40%. One more thing, is this lignin, this huge amount of lignin, if I can validate this to produce value added chemicals, then the whole process will be cross subsidised so that the ethanol production can come down. So, lot of work. Many research schools, including my team at Indian Oil R&D. They are concentrating on how to valorize this lignin, which is otherwise a waste byproduct being generated from these plants. Can this be converted into value added chemicals and bioplastics? We have some good success stories to be implemented. All these interventions put together in the next five to six years, we are very confident that the cost efficiency of second-generation ethanol will be almost, if not on par, it will be almost in the same bracket as that of first generation.

That's interesting that the secret of how to make it costs level, because I understand in other countries, they are still struggling with how to make it on par. I understand that India's government set a target just like you mentioned earlier for the 20 volume percent of ethanol penetration April 2025. Brazil is currently implementing actually the highest blending at 27%. The U.S., gasoline in the U.S. typically contains 10 volume percent of ethanol, so with 20% of ethanol, India currently sits between the U.S. and Brazil amongst the top three of ethanol in gasoline. After this E20 what is the next plan? Do you think ethanol percentage will be increased further. If yes, until what level? If not, why?

So, it's a good point to Crystal gaze the future. But what I feel is many automakers in India, whether they are multinational automakers, especially the passenger car makers where we make gasoline consumption. They are now working on flexi fuel platforms. The two Wheelers and the four Wheelers, they are working on flexi fuel platforms. So while the base blending percentage in my personal perception will remain at 20%, most of the oil marketing companies beyond 2025 they are going to launch E100 that is 100% ethanol, directly getting dispensed and like Brazil in a retail outlet, the customer would be having a choice if he wants to go beyond the 20% for price advantage and to take the price advantage he can mix on board the higher amount of ethanol, I think we would be going in that direction. Once the automobile industry is ready with flexi fuel, vehicles are flying on Indian roads. I know couple of two Wheeler manufacturers, Major 2 Wheeler manufacturers of the country and also four, two passenger car manufacturers are in advanced stages of field validation of their flex fuel vehicles and once they start playing on the road, probably the oil marketing companies and the entire oil industry is fully geared up to large E100, our ethanol availability, our projections are also indicating beyond 2025. I think we'll be having more than 2,000 crore litres, 1 crore in the Indian system is 10 million. We are going to have 2,000 crores and for satisfying 20% blending mandate you require only on national basis 1,000 crores. So, we will be having twice the amount of ethanol available in the country. It's a good motivation for people to go to flexi fuel mode and blend as much of ethanol that one can go depending on the consumer choice and oil marketing companies will start dispensing E100 straight.

I understand that there was a pilot on the E100 in three gas stations back in Pune, right?

Yes, it's launched by our own company.

Ah, are they still operating?

Well, I mean the dispensing infrastructure is ready, but the vehicles are not there, maybe one or two pilot vehicles we are giving but once the vehicles are there, we are ready to replicate on national basis.

Wow. so that it means that the penetration of ethanol in PAN India basis will be more than 20%, right? You really put India like in the top three of the ethanol users or maybe the top two because the U.S. still at 10%. India is very active in searching for alternative fuels for transport. I'm aware also that you are, I mean the country is trying methanol gasoline blending just like you mentioned earlier. In fact, I heard that M15 gasoline was sold in a fuel station in Assam last year. Is it the commercial or pilot sales?

These are pilot sales because in M15 blend were being intensely investigated in the existing vehicle park, there are some limitations. We are just trying to circumvent this, I mean I was the one who led the team to first develop a stable M15 blend because Methanol, 15% methanol is quite unstable in gasoline, the storage stability is very poor. So, me and my team, we were able to develop a good coupler which can pull the methanol in gasoline for quite some time, for six to eight months. And with that we did lot of studies both engine level studies and field validation studies and there are one or two points, some incompatibility with some material is identified. So, the automobile industry is working on how to replace those materials and make them M15 compatible, it's still largely in the testing stage.

Do you think the government will mandate methanol blending gasoline because now you have a quite advanced mandate on ethanol. With that, do you think methanol also will be mandated in gasoline?

My take and if I know the minds of policymakers because I worked very closely with the policy makers of India's government. So, in instead of pressing methanol into gasoline, we are determined to go the ethanol way for gasoline blending. For methanol, we are trying to look revenues for diesel, in fact MD15 is the one which is now being extensively used for city bus transport and heavy-duty diesel segment. As I'm speaking to you, 70 buses in one of the South southern Indian states are on a field trial with 15% of methanol blended diesel being used in them and they are being closely watched and observed, studied scientifically for emission reduction and other related parameters. I think in my personal perception, gasoline will be entirely on ethanol and methanol, if available in large quantity. It can be diverted to diesel, or it can be diverted to inland waterways where it can be M100 straight away. All the fishing boats and small boats can be run, replacing entire diesel with M100.

OK. But I also found out that there's an unusual blend of ethanol and diesel, of which also it's under trials. Can you explain a bit on the ethanol and diesel and the difference between the methanol diesel blends?

I was expecting this question because when I was in Indian oil, we were experimenting with all kinds of oxygenates. You see the motivation for blending ethanol and diesel or methanol in diesel. It’s like with ethanol blending in gasoline way back in 2000, we mandated 7% of blending of biodiesel and diesel because ours is a dieselized economy with more than 100 million metric tonnes diesel per annum India consumes. For the commercial segment, for the agricultural segment, and even with a 5% reduction in diesel consumption, makes a great impact on our imports of the crude oil. Biodiesel is a scarce commodity in the country for the want of the right kind of feedstocks. Non-edible vegetable oils are not available in our country. That's the reason why biodiesel programme never took off. Now that we are biassed by the availability of ethanol, and we feel that ethanol would be surplus post 2025, why not use some of the surplus ethanol by diverting it to diesel. With that idea, we started ED5 experimentation. Two leading heavy-duty bus manufacturers and truck manufacturers join hands with us to experiment on ED5 at the engine level. You see one of the main limitations of blending ethanol and diesel is the flashpoint will go down. Flash point will go down from 35°C to almost nine to 10°C. That's very low and the people feel that it would be a safety hazard. What is the flashpoint of pure gasoline. It is -20. When you are dealing for times immemorial with a product which is -20 Deg C flash point. This is after all plus flash point. I'm talking about Flash point, and you know lower the flashpoint the combustion efficiencies will go up. We are working very closely with the fuel injector manufacturers like Bosch, we are experimenting right now, a lot of experimentation is going on at the internal R&D Centre and with these fuel injector manufacturers and heavy-duty truck manufacturers. Maybe next year you will hear something on ED5.

I'll speak again with you next year. It's interesting really. So, now coming back to ethanol you mentioned earlier that India will have two times of the ethanol supply compared with the demand, right? Regionally, Asia is a net importer of ethanol. It’s a region, although it's different between country to country. Probably India will export ethanol becoming a net exporter of ethanol in the future? I understand you also looked into cellulosic ethanol. Any consideration to use cassava in this case and non-edible cassava as feedstock?

For cassava not much work is going on, but there is a new variety called Napier grass that is available for Indian ambient conditions. Few experiments in certain parts, especially in the southern part of the country, people are cultivating in the name of energy crops, this Napier grass, which can easily be grown with little irrigation facilities. And this Napier grass can be converted from second generation ethanol pathways to ethanol or Napier grass can also be converted into biogas through bio-fermentation mechanism. Some people are experimenting with Napier grass, but I would like to give you a brand-new feedstock which we experimented for ethanol production. That is the refinery off gas. You see, in the entire carbon train, 6% of carbon trail is accounted by the refining industry, and each refinery emits a copious amount of carbon monoxide, carbon dioxide and little bit of hydrogen. I used to sit on the board of LanzaTech USA., which is a carbon recycling company. It is having a patented bio fermentation, gas fermentation process whereby all the off gases, flue of gases from any industry off gases like whether it is from steel industry or refinery industry, they can be converted through microbiological pathways to ethanol and higher alcohol. They have all already had success running plants in China where they are converting blast furnace off gases to ethanol and the plants are huge there. In fact, in Belgium, in Ghent, ArcelorMittal, one of the largest steel plants, they’re setting up one of the largest ethanol production units, utilising their off gases from the steel mills using this Lanzatech technology. So, we took a cue. Since I'm on the board of the LanzaTech, and I'm a researcher to. We experimented a little bit with our refinery off gas and for the first time in the world adopting Lanzatech technology. We set up a 33,000 metric ton per annum plant converting refinery off gas to ethanol. The plant annual capacity is 33,000. Last month the plant is commissioned, gone on stream. We started producing green ethanol, so to say quote on quote with 99.9% purity. It's a very successful venture more for us to extend this LanzaTech technology from steel mill off gas to refinery off gas. Based on the success of this plant, almost all 23 refineries of our country may add one more feedstock to produce ethanol. That's how we have optimism that we will have surplus ethanol.

OK beautiful. So, you use recycle the pollutions from flue gases and everything to produce ethanol, right? But the name will become tricky. It will not be bioethanol anymore.

No, no. On the life cycle analysis basis, both U.S. and India recognise this particular ethanol from this pathway as an advanced biofuel because we are not using any chemical substance to convert the off gases. The off gases are renewable because every now and then you can produce these, and the refinery Carbon Trail can be reduced. The conversion pathways are very less carbon intensive, so it ensures the mandatory 65% overall life cycle emission reduction. That's why this particular pathway is very well treated as a bio pathway and this product is a bio path.

OK, Interesting. It kind of goes directly into what they currently say are called E-fuels. The synthetic ethanol. Beautiful. Wow. My last question to you. Other Asian countries such as the Philippines, Thailand, Vietnam, Japan, also they are mandating the addition of ethanol to gasoline. Philippines and Thailand at 10%, Vietnam at 5% and Japan also mandates certain volume of ethanol to be blended each year. Although it’s mostly blends with Bio ETBE at an equivalent volume. In India do you see green ethanol becoming wider area? With the ethanol E20 mandate now being the highest in Asia, do you think it will drive other countries to increase their mandate and perhaps also using green ethanol.

I very well see the Indian examples can be easily emulated and replicated especially the green ethanol part of it. Probably the countries that you mentioned because of the possibility of free land and cultivation of agricultural produce. if second- and first-generation sources are not tenable at least the third generation. We are calling it as third generation, though classical definition is all route to ethanol. In our country we are calling refinery off gas or industrial off gas to ethanol as the third generation partners and these pathways because all these countries are having refineries, all these countries are having cement plants and steel plants and they emit lot of industrial off gases and probably this pathway can be deployed there and you can produce ethanol and it can be very well treated as a bio-ethanol. India can offer the collaborative proposition to these countries to help in understanding the technology. LanzaTech is having a great presence in India, and I don't see why it can’t extend its presence into these other Asian countries. I can be a great ambassador and a facilitator should any Asian company like to adopt these technologies; I can make them understand and I can introduce them to real companies which offers this technology. I see a great future not as a commercial man. I'm taking this because this kills two birds at one shot. You see, you can reduce the carbon footprint of your industrial operations and you can convert that into a gainfully utilised product and blending oxygenate so that your oil pollution can also come down. it's a win win situation for the entire industry as well.

I tend to agree with you on this point, reducing the greenhouse gases emissions at the same time, increasing the ethanol production of the country in one go, is interesting. It's been a good discussion with you. Thank you very much for being here with me and explaining India's ethanol programme, the past, the current and the future. India is a vast and huge country. Anything that India does typically will drive the growth of everything else across the globe. Because India is such a big country. So finally, let's hope that whatever we do to reduce the carbon emissions and greenhouse gases emissions in the world will not leave unintended consequences to the next generation to deal with. So, thank you for listening to this podcast and talk to you in the next.

Thank you.