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    Assam Cabinet approves Ethanol Production Promotion Policy 2021

    Assam is the second state in the country to bring out an ethanol policy, and is thus among the pioneers in the line.

    Guwahati: The State Cabinet on Thursday has approved the Assam Ethanol Production Promotion Policy 2021 which shall be valid till March 31, 2026.

    Assam is the second state in the country to bring out an ethanol policy, and is thus among the pioneers in the line.

    The Ministry of Petroleum & Natural Gas, Govt. of India, formulated the National Policy on Biofuels 2018, which aims to increase the usage of biofuel in the energy and the transportation sector. India’s net import of petroleum was 185 million metric tonnes at a cost of US $55 billion in 2020-21 with a lion’s share of its utilization having been in the transportation sector.

    Promoting the use of biofuel like ethanol as a blend stock with main automotive fuel like petrol or diesel can definitely alleviate the draining of the Forex Reserves. Blending of ethanol with petrol will also reduce pollution from vehicular emissions.

    The objective of this police is: i) incentivization of production of ethanol from all feedstocks permitted under NPB 2018. ii) offering of fiscal benefits and providing of an enabling environment for the promotion of, and investment in, fuel-grade standalone green-field ethanol manufacturing units by facilitating and financially incentivizing potential investors, iii) increase in incomes of farmers producing feed-stock/raw materials for use in ethanol manufacturing and iv) creation of local employment opportunities through promotion of the new ethanol units.

    Incentives under the Policy: The incentives under the Policy to standalone green-field ethanol producing industrial units – catering solely to Oil Manufacturing Companies (OMCs) for blending with petrol and diesel – comprise: –

    i)             Capital Subsidy at 20% of the cost of Plant and Machinery, with maximum INR 5 crores – in addition to the 30% Capital Subsidy under provision of CCIIAC under NEIDS 2017;

    ii)            Power Subsidy @INR 1.00 per unit, in addition to the INR 2.00 per unit offered under Industrial and Investment Policy of Assam 2019, for a period of 5 years from the date of industrial production; subject to an overall maximum of INR 75.00 lakhs per annum;

    iii)           5% Interest Subsidy on working capital loan for 5 years subject to an overall ceiling of INR 50 lakhs per annum; in addition to the 2% interest subsidy offered under Industrial and Investment Policy of Assam 2019; and the 3% interest subsidy under NEIDS 2017;

    iv)           100% SGST Reimbursement for a period of 5 years, upper limit being 250% of Fixed Capital Investment; in addition to the reimbursement of the central share of the CGST, IGST and Income Tax offered under NEIDS 2017 for a period of 5 years;

    v)            100% Exemption of Land Conversion Fees for conversion of land to industrial classs

    vi)           Employment Incentive in the form of reimbursement of expenditure on account of provident fund contribution of permanent resident employees for 5 years; and

    vii)          Skill Development Subsidy of INR 20,000 per employee or ASDM rates, whichever is lower, the incentive being applicable only for training of permanent resident employees.

    Only green-field standalone 100% fuel-grade ethanol producing industries which supply 100% of their produced ethanol to Oil Manufacturing Companies (OMCs) under the blending with petrol and diesel, shall be eligible for the incentives under the Policy.Ethanol production from all feedstocks permitted under NBP 2018shall be allowed under the Policy.

    Industries& Commerce Department, Government of Assam, shall be the Nodal Department responsible for implementation of this policy.Incentives under this policy shall be processed as per the provisions of the Industrial and Investment Policy of Assam, 2019, and the Operational Guidelines to be announced for that Policy.

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