SIAMSIAM

Ethanol Blending – Auto Industry’s Ethanol Blending – Auto Industry’s PerspectivesPerspectives

P.K. BanerjeeP.K. BanerjeeDeputy General Manager, Tata Motors Ltd., PuneDeputy General Manager, Tata Motors Ltd., Pune

National Seminar on “Biofuels – Need of the National Seminar on “Biofuels – Need of the hour”hour”

October 13, 2008, New DelhiOctober 13, 2008, New Delhi

SIAMSIAM

ContentsContents

• BackgroundBackground

• Actions taken by MoPNG on EBPActions taken by MoPNG on EBP

• Positive and Negative impacts of E10 on Environment, HealthPositive and Negative impacts of E10 on Environment, Health

• 10% Ethanol Impact on Vehicle Performance10% Ethanol Impact on Vehicle Performance

• Vehicle Modifications Due to Ethanol Blending - General Vehicle Modifications Due to Ethanol Blending - General

TrendsTrends

• SIAM – Government Consortium ProjectSIAM – Government Consortium Project

• Concerns / Issues to be ResolvedConcerns / Issues to be Resolved

• Commercial AspectsCommercial Aspects

• Blending related issuesBlending related issues

• Taxation issuesTaxation issues

• Labelling IssuesLabelling Issues

• SIAM’s Demand for E10 Program in IndiaSIAM’s Demand for E10 Program in India

SIAMSIAM

BackgroundBackground World over, many countries are having regulations to blend 10% ethanol in Gasoline.

India is also developing ethanol blending programs (EBP) to reduce dependence on imported oil & to provide support to sugarcane farmers.

Ministry of Petroleum and Natural Gas (MoPNG) notified compulsory 5% blending of ethanol in gasoline in 9 States and 4UTs from January 2003. As program did not take off, MoPNG amended notification twice, in 2004 and 2006 to bring change in ground reality.

The Government already announced 10% ethanol blending of gasoline (E10) from October 2008 throughout the country. However no notification is released because of which OMC’s have not started 10% ethanol blending.

As per latest News, Sugarcane industries are not producing enough Fuel ethanol because of pricing issues. Ethanol is not available even for 5% blending through out the country.

Meanwhile, Vehicle manufacturers and Oil companies are assessing the technical feasibility of Vehicles complying with 10% ethanol blend.

“ As per SIAM, Intention of Government for blending 10% ethanol in Gasoline is a welcome step, However, SIAM feel that a-prior resolution of some of major issues will ensure success of E10 Program in India”

SIAMSIAM

Actions Taken by MoPNG on EBPActions Taken by MoPNG on EBP

Mandatory 5% Ethanol blending in gasoline in 9 States & 4 UTs w.e.f. January 1, 2003.

Mandatory 5% Ethanol blending in gasoline in 9 States & 4 UTs w.e.f. January 1, 2003.2002200220022002

Mandatory 5% Ethanol blending in 10 States & 3 UTs subject to commercial viability & ethanol availability

Mandatory 5% Ethanol blending in 10 States & 3 UTs subject to commercial viability & ethanol availability2004200420042004

5% Ethanol blending made mandatory throughout country (except NE, J&K, A&N) subject to commercial viability w.e.f 01.11.2006

5% Ethanol blending made mandatory throughout country (except NE, J&K, A&N) subject to commercial viability w.e.f 01.11.20062006200620062006

CCEA (Cabinet Committee on Economic Affairs) decided to implement on October 9, 2007:Voluntary 10% ethanol blending – from Oct ’07Mandatory 10% ethanol blending – from Oct ‘08

CCEA (Cabinet Committee on Economic Affairs) decided to implement on October 9, 2007:Voluntary 10% ethanol blending – from Oct ’07Mandatory 10% ethanol blending – from Oct ‘08

2007200720072007

Union Cabinet Approved National Bio Fuel Policy on Sep 200820 % by 2017 for the blending of biofuels – bio-ethanol and bio-diesel

Union Cabinet Approved National Bio Fuel Policy on Sep 200820 % by 2017 for the blending of biofuels – bio-ethanol and bio-diesel

2008200820082008

SIAMSIAM

G.S.R.580(E).– 1) In exercise of the powers… ………. the Central Government hereby directs that G.S.R.580(E).– 1) In exercise of the powers… ………. the Central Government hereby directs that subject to commercial viabilitysubject to commercial viability, the oil marketing companies shall sell five per cent ethanol-, the oil marketing companies shall sell five per cent ethanol-blended-petrol, as per Bureau of Indian Standards specifications, in the following States and blended-petrol, as per Bureau of Indian Standards specifications, in the following States and Union Territories, namely:-- Union Territories, namely:--

3. The Central Government may, 3. The Central Government may, suo motu, or on a reference made to it,suo motu, or on a reference made to it, after due consideration of after due consideration of facts, by an order, modify the areas, and the percentage of ethanolfacts, by an order, modify the areas, and the percentage of ethanol in the ethanol-blended-petrol in the ethanol-blended-petrol that may be supplied, and specify the that may be supplied, and specify the period for the sameperiod for the same..

MoPNG Notification (Sep ’06)MoPNG Notification (Sep ’06)

Sl. No. States Sl. No. States1 Andhra Pradesh 11 Kerala2 Bihar 12 Maharashtra3 Chhatisgarh 13 Madhya Pradesh4 Delhi 14 Orissa5 Goa 15 Punjab6 Gujarat 16 Rajasthan7 Haryana 17 Tamil Nadu8 Himachal Pradesh 18 Uttar Pradesh9 Jharkhand 19 Uttaranchal

10 Karnataka 20 West Bengal

Sl. No. Union Territories

1 Daman and Diu 2 Dadra and Nagar Haveli

3 Chandigarh4 Pondicherry

20 States20 States 4 UTs4 UTs

SIAMSIAM

E10 Ethanol Fuel Specificationsreleased by BIS

SIAMSIAM

10% Ethanol Blended Gasoline Specifications10% Ethanol Blended Gasoline Specifications

• In India, IS 2796-2000 provides specifications for Gasoline fuel blended with max. 5% (vol) Ethanol.

• BIS committee under Mr. RK Malhotra worked on drafting specifications for 10% Ethanol blended Gasoline.

• Industries were asked to provide their specific requirements regarding E10 fuel specifications so that the Industries concern can be safeguarded during E10 fuel specs finalization.

• SIAM studied various fuel standards world-wide and suggestions regarding E10 fuel specs are made in BIS PANEL.

• BIS released 10% Ethanol in gasoline specification as separate table

SIAMSIAM

10% Ethanol blended Gasoline (E10) Specifications10% Ethanol blended Gasoline (E10) Specifications• E10 fuel specifications are available for China, Thailand, Australia,

USA, California, South Africa.• Europe, New Zealand, France have draft specifications for E10 fuel.• Brazil has specifications for E22 fuel.• WWFC specifies that E10 fuel should meet all the requirements of

Gasoline fuel. • When 10% Alcohol is blended with Gasoline, the following properties

are affected :• Distillation characteristics• Reid vapour pressure• Vapour lock index (or) Flexible volatility Index• Oxygen content• Octane number & rating• Density• Water Tolerance• Heating value (not controlled in the standards)• Stoichiometric air/fuel ratio (not controlled in the standards)

SIAMSIAM

in Normal Gasoline in E10 Fuel

BS IIBS IIIBS IV

China 10.0 (+/-) 2.0

Australia - 10 max

Brazil 1 max 24 (+/-) 1(E22 fuel)

Thailand 9 - 10

South Africa 7.5 max 9.5 max

New Zealand < 1 10 max

France 5 max 10 max

California 10 max

Japan 3 max No E10 fuel

USA 9 to 10

Canada 0.5 max No E10 fuel

WWFC All Categories - up to 10

Chile up to 5 No E10 Fuel

petrol(before 2005)

-

Bio-fuel petrol 10 max

vol %

Ethanol Content (Oxygenates)

Europe 5 max

India 5 max

Countries Grade

8 (+/-) 2

Ethanol ContentEthanol Content

ProposedProposed

SIAMSIAM

Reid Vapour PressureReid Vapour Pressure• Recommendation: E10 fuel can have same RVP as E5 values as specified in Indian

Standard IS 2796-2000

In Gasoline In E10 Fuel

kPa kPa

BSII 35-60

(35-67 for ethanol blended petrol) @ 38 oC

35 - 67

BS III 60 max

(67 max for ethanol blended petrol) @ 38 oC

67 max

BS IV 60 max 67 max

PH-II

PH-III 88 max (Sep 16 to Mar 15)72 max (Mar 16 to Sep 15)

-

Brazil 45-62 @ 37.8 oC 69 max @ 37.8 oCThailand

South AfricaNew Zealand 65-90 kPa 72-90 kPa

Class AClass D/D1CaRFG Phase-2CaRFG Phase-3

Japan 44 to 78 kPa @ 37.8 oC No E10 fuel

USA 48.0 - 55.8 55 to 62.8

Canada 41 - 72 No E10 fuelWWFC Category 1, 2, 3

& 4

Chile 69 max (Winter);86 max (Summer)

No E10 Fuel

(before 2005)

Bio-fuel petrol 67.76 kPa max (summer period)

Europe 60.0 kPa max (summer period)

Reid Vapour PressureCountries Grade

China

India

France

California60-90 kPa48 max

44 to 50 kPa

45-60 (for ambient temperature > 15 oC)

55-70 (for ambient temperature 5-15 oC)

88 max (Sep 16 to Mar 15)74 max (Mar 16 to Sep 15)

62 max @ 37.8 oC45 - 75

45-60 kPa

ProposedProposed

SIAMSIAM

of Gasoline of E10 Fuelno units no units

BSII

BS III

BS IV Summer: 750 maxOther Months: 950 max

Summer: 950 maxOther Months: 1050 max

South Africa Summer: 950 maxWinter: 1000 max

Summer: 950 maxWinter: 1000 max

New Zealand 1150 max Summer: 1150 maxAutumn & Spring : 1200 max

Winter: 1300 max

Class A - -

Class D/D1 1150 (D1) 1150 (D1)

Vapour Lock Index (or) Flexible Volatility Index[ (VLI=10RVP+7 E70) ]

France

India

Countries Grade

Summer: 750 max(900 max for 5% ethanol blended

petrol)Other Months: 950 max

(1050 max for 5% ethanol blended petrol)

Summer: 900 max

Other Months: 1050 max

Vapour Lock Index (or) Flexible volatility IndexVapour Lock Index (or) Flexible volatility Index

PPRROOPPOOSSEEDD

• Recommendation: can be same as existing Gasoline/E5 fuel.

SIAMSIAM

New Properties/parameters available in Regulations of Other CountriesNew Properties/parameters available in Regulations of Other Countries

1.1. DistillationDistillation

- T10 (10% evaporation temperature)- T10 (10% evaporation temperature)

- T50 (50% evaporation temperature)- T50 (50% evaporation temperature)

- T90 (90% evaporation temperature)- T90 (90% evaporation temperature)

- D.I. (Distillation index)- D.I. (Distillation index)[= (1.5 * T10) + (3 * T50) + T90[= (1.5 * T10) + (3 * T50) + T90

+ (11 * mass% of oxygen) ]+ (11 * mass% of oxygen) ]

2.2. Existent unwashed GumExistent unwashed Gum

3.3. Water contentWater content

4.4. Mercaptan sulfur contentMercaptan sulfur content

5.5. IronIron

6.6. PhosphorusPhosphorus

7.7. PotassiumPotassium

8.8. ManganeseManganese

9.9. SiliconSilicon

10.10. SedimentsSediments

11.11. Mechanical impuritiesMechanical impurities

12.12. DetergencyDetergency

13.13. KeroseneKerosene

14.14. Water soluble acids or alkalisWater soluble acids or alkalis

15.15. Flash pointFlash point

16.16. Carburettor cleanlinessCarburettor cleanliness

17.17. Particle contamination, size Particle contamination, size distributiondistribution

18.18. Intake valve stickingIntake valve sticking

19.19. Combustion chamber depositsCombustion chamber deposits

- Method I (ASTM D6201)- Method I (ASTM D6201)

- Method 2 (CEC-F-20-A-98)- Method 2 (CEC-F-20-A-98)

- Method 3 (TGA FLTM BZI154-01)- Method 3 (TGA FLTM BZI154-01)

20.20. Deposit control additivesDeposit control additives

21.21. Vapour-Liquid ratio temperature Vapour-Liquid ratio temperature (T(TV/L=20V/L=20))

22.22. Silver strip corrosionSilver strip corrosion

23.23. Total oxygenatesTotal oxygenates

24.24. Ether oxygenatesEther oxygenates

- Di-isopropyl ether (DIPE)- Di-isopropyl ether (DIPE)

- Methyl tert-butyl ether (MTBE)- Methyl tert-butyl ether (MTBE)

- Ethyl tertiary Butyl ether (ETBE)- Ethyl tertiary Butyl ether (ETBE)

Are we going to Are we going to recommend any recommend any specs for these specs for these properties for properties for E10 Fuel?E10 Fuel?

SIAMSIAM

Total Registered Vehicles ~ 87 Mn

Commercial Vehicles

14%

Passenger Vehicles

13%

Two Wheelers

73%

Indian Vehicle ParcIndian Vehicle Parc

Source: Govt. of India Statistics of Registered Vehicles & SIAM estimates

2006

SIAMSIAM

Fuel logistics Scenario in India

Surplus / (Deficit) – Y 2003/04

Diesel - 6.18 MMTPA.

Gasoline - 2.98 MMTPA.

LPG - (2.18) MMTPA

Kerosene - Nil (after stopping import by parallel Mkt)

ATF - 1.66 MMTPA

Gasoline & Diesel remain surplus for next 10 years while LPG & Natural Gas continue to be deficit.

Source: Petrofed

SIAMSIAM

Studies on 2 wheelers

Study the Effects of Ethanol blended gasoline fuel by Splash Procedure ( E-05,E-10) Emission { E-05,E-10 }

Life of Components { E-10 } Ethanol Compatibility { E-10 }

Cost Benefit { E-10 }

Performance ( on C/D ) { E-05,E-10 }

SIAMSIAM

Test Results ( Performance / Emission ) : (Y2K Compliant vehicles)

Legends : -OK within Spec.

Remarks :- Drop in fuel efficiency observed

MODEL ‘A’

Mass Emission 88 ON E-05 E-10 Remarks

CO , gm / km 40 ~ 78 % drop

HC , gm / km 0 ~ 5 % increase

NOx , gm / km 17 ~ 25 % increase

HC + NOx , gm / km 7 ~ 8.5 % Increase

Remarks :- Drop in CO , gm / km, Increase in Nox , gm/km

Vehicle Performance 88 ON E-05 E-10 Remarks

Power , kW No significant variation

Acceleration , Sec Comparable

Max Speed , kmph

FE , kmpl 2 ~ 7% drop

Comparable

SIAMSIAM

Remarks :- Drop in CO ,& Increase in HC , Nox gm / km

Mass Emission 88 ON E-05 E-10 Remarks

CO , gm / km 30 ~ 64 % drop

HC , gm / km 9.5 ~ 24 % Increase

NOx , gm / km 10 ~ 32 % Increase

HC + NOx , gm / km 10 ~ 27 % Increase

Legends : -OK within Spec

Remarks :- Drop in fuel efficiency & Acceleration observed

Test Results ( Performance / Emission ) : (Y2K Compliant vehicles)

MODEL ‘B’Vehicle Performance 88 ON E-05 E-10 Remarks

Power , kW Increase

Acceleration , Sec 5.5 ~ 7% drop

Max Speed , kmph Comparable

FE , kmpl 2 ~ 4% drop

SIAMSIAM

Test Results :- DRIVEABILITY ( Overall DR ) 0~5 scale Rating

DR

Model ‘A’

Judgment

Model ‘B’

Judgment

Legends: - Drop in rating

Remarks :- 0.5-1.0 rank drop is felt by Customer

88 ON E-05 E-10

A A-a A-0.5

OK

B B-b B-0.4

OK

SIAMSIAM

10% Ethanol-Blended Gasoline

Remarks :- Drop in Vehicle Perf / DR parameters

Existing Scenario ( All vehicles upto E-05 compliant ) :

OK NG

Veh Perf Parameters :

- Power - Satisfactory - Satisfactory 2 ~ 3% drop- Mileage ( IDC ) - Satisfactory - Satisfactory 4 ~ 7% drop- DR - Satisfactory - Satisfactory Drop- Gradeability - Satisfactory - Satisfactory Drop- Knocking - Satisfactory - Satisfactory Increases

Veh Em Parameters :Mass Emission - Satisfactory CO : 15 ~ 40% drop ; HC+Nox : -2 ~ +9% CO : 40 ~ 50% drop ; HC+Nox : 2 ~ 26% incrIdle Em / RPM - Satisfactory

Components Wear :- Rubber - Satisfactory - Satisfactory - Gets hardened / Toughness to be improved- Plastic - Satisfactory - Satisfactory - Satisfactory- Aluminium - Satisfactory - Satisfactory - Slightly more deposition on piston / cyl head /

carb insulator etc due to A/F characteristics- Sheet Metal - Satisfactory - Satisfactory - Satisfactory- Paint - Satisfactory - Satisfactory - Peel off / Toughness to be improved

Model Category Parameter

Existing Models

CO - 10 ~ 20% drop ; RPM - 2 ~ 5% drop

E-10E-05E-0( Ethanol 0% Blend ) ( Ethanol 5% Blend ) ( Ethanol 10% Blend )

CO - 40 ~ 60% drop ; RPM - 5 ~ 7% drop

Requires Carb re-jetting (for DR , FE ,

Knocking) + Em C/Measure

Marginal drop observedOverall satisfactory

SIAMSIAM

Positive Impacts of EthanolPositive Impacts of Ethanol Reduces vehicle emissions (CO,HC), Green house gases (COReduces vehicle emissions (CO,HC), Green house gases (CO22)) & protects & protects

environment from climate change effects.environment from climate change effects.

Less dependence on petroleum products & Less dependence on petroleum products & reduces imports of crude oil.reduces imports of crude oil.

Greater use of biofuels brings Greater use of biofuels brings oil market in to balanceoil market in to balance & reduces oil prices. & reduces oil prices.

Increases Increases National energy security.National energy security.

Locally produced biofuels can Locally produced biofuels can provide energy for local agriculturalprovide energy for local agricultural,, industrial industrial & household uses at less than the cost of fossil fuels.& household uses at less than the cost of fossil fuels.

Replaces bad gasoline additivesReplaces bad gasoline additives (MTBE & lead) which are sources of surface (MTBE & lead) which are sources of surface & ground water contamination & dangerous to human health.& ground water contamination & dangerous to human health.

Substantial Substantial increase in employmentincrease in employment opportunities in the rural sector. opportunities in the rural sector.

Increases net farm income & Increases net farm income & strengthens rural & agricultural economiesstrengthens rural & agricultural economies..

Greening of wastelandsGreening of wastelands & regeneration of forest lands. & regeneration of forest lands.

Source: UN report “Sustainable Bioenergy: A Framework for Decision Makers”, April 2007

SIAMSIAM

Negative Impacts of EthanolNegative Impacts of Ethanol Increased Increased Aldehyde (a carcinogen) emissionsAldehyde (a carcinogen) emissions,, is a threat to nose, eyes, throat

& possibly causes cancer.

Increases NOx, Evaporative emissions Increases NOx, Evaporative emissions & fuel consumption.& fuel consumption.

Increased industrial wastesIncreased industrial wastes from sugar industries, distilleries which may be from sugar industries, distilleries which may be mixed up with rivers is an issue.mixed up with rivers is an issue.

Increased ethanol production will lead to large scale mono-cropping of Increased ethanol production will lead to large scale mono-cropping of sugarcane which causes sugarcane which causes severe agricultural soil losses & nutrient leachingsevere agricultural soil losses & nutrient leaching..

Substantial increase in water consumptionSubstantial increase in water consumption during ethanol production & during ethanol production & sugarcane cultivation.sugarcane cultivation.

As E10 As E10 vapour emissionsvapour emissions will be more than gasoline, there is will be more than gasoline, there is concern for concern for health.health.

Demand for landDemand for land to grow sugarcane could put pressure on competing land to grow sugarcane could put pressure on competing land uses for food crops, resulting in likely uses for food crops, resulting in likely increase in food pricesincrease in food prices..

Demand for ethanol would increase the price of sugarcane thereby affecting Demand for ethanol would increase the price of sugarcane thereby affecting the the price of sugar & other sugar-derived food commoditiesprice of sugar & other sugar-derived food commodities..

Source: UN report “Sustainable Bioenergy: A Framework for Decision Makers”, April 2007

SIAMSIAM

E10 Impact on Vehicle PerformanceE10 Impact on Vehicle Performance• Driving abilityDriving ability of ethanol is lower because of Distillation characteristics & RVP of of ethanol is lower because of Distillation characteristics & RVP of

ethanol blended fuel. Reducedethanol blended fuel. Reduced Cold & Hot StartabilityCold & Hot Startability & Acceleration& Acceleration performance.performance.

• E10 fuel affectsE10 fuel affects material compatibilitymaterial compatibility,, engine wear & life. Rubber swelling & engine wear & life. Rubber swelling & metalmetal corrosioncorrosion increases.increases.

• International experience confirms up to 3%International experience confirms up to 3% Increase in Fuel consumptionIncrease in Fuel consumption due to due to lower energy value of ethanol.lower energy value of ethanol.

• Tests confirms up to 2% Tests confirms up to 2% reduction in Power.reduction in Power.

• NOx & Evaporative emissionsNOx & Evaporative emissions increases up to 10% even though there is a increases up to 10% even though there is a reduction of CO and CO2 emissions .reduction of CO and CO2 emissions .

• MisfireMisfire (in some cases)(in some cases)

• In-use vehiclesIn-use vehicles may not be compatible with E10 fuelmay not be compatible with E10 fuel

• Ethanol canEthanol can absorb waterabsorb water; If water enters the fuel tank, it dilutes ethanol, reducing ; If water enters the fuel tank, it dilutes ethanol, reducing its value as a fuel. It causes problems ofits value as a fuel. It causes problems of phase separationphase separation in fuel.in fuel.

• Ethanol Ethanol absorbs dirts absorbs dirts & carrries& carrries inside the fuel lines and fuel tank, thus inside the fuel lines and fuel tank, thus contaminating the car engine system.contaminating the car engine system.

SIAMSIAM

Vehicle Modifications Due to Ethanol Vehicle Modifications Due to Ethanol Blending - General TrendsBlending - General Trends

Source: Energy Efficiency and Renewable Energy Department, U.S. Department of Energy

SIAMSIAM

SIAM – Government Consortium ProjectSIAM – Government Consortium Project A joint project has been formulated in association with IOC, ARAI, SIAM, A joint project has been formulated in association with IOC, ARAI, SIAM,

MoHI and MoPNG to study the technical feasibility of E10 fuel.MoHI and MoPNG to study the technical feasibility of E10 fuel.

Project will have four parts:Project will have four parts:

Part I: Material Compatibility testsPart I: Material Compatibility tests

Part II: Emission performance testsPart II: Emission performance tests

Part III: Fuel and Lube testing, andPart III: Fuel and Lube testing, and

Part IV: Hot start and cold start testsPart IV: Hot start and cold start tests

In this project, 29 vehicles will be tested;In this project, 29 vehicles will be tested;

4 wheelers – 11 nos.4 wheelers – 11 nos.

2 wheelers – 15 nos.2 wheelers – 15 nos.

3 wheelers – 3 nos.3 wheelers – 3 nos.

Project proposal had already been submitted to Government.Project proposal had already been submitted to Government.

SIAMSIAM

Concerns / Issues to be Resolved – Concerns / Issues to be Resolved – Commercial AspectsCommercial Aspects

Adequate Ethanol is Adequate Ethanol is not availablenot available even for 5% blend. even for 5% blend.

Sugarcane crop being Sugarcane crop being seasonalseasonal, ethanol availability as well as , ethanol availability as well as priceprice become seasonal.become seasonal.

Multiple taxesMultiple taxes such as state/central excise duty, sales tax, surcharge on such as state/central excise duty, sales tax, surcharge on S.T., export fee, import fee, permit fee, license fee & administration fee on S.T., export fee, import fee, permit fee, license fee & administration fee on denatured ethanol complicates inter-state movement.denatured ethanol complicates inter-state movement.

Licensing and ProcurementLicensing and Procurement rules not clear because E10 is not listed as rules not clear because E10 is not listed as declared goods for excise duty.declared goods for excise duty.

BlendingBlending methodology is not standardized methodology is not standardized

Existing Existing Handling, Storage, dispensingHandling, Storage, dispensing & retail Distribution systems are & retail Distribution systems are not compatible with E10 blended gasolinenot compatible with E10 blended gasoline

Requires some specialized Requires some specialized foam technologiesfoam technologies to fight E95 & E10 fire to fight E95 & E10 fire hazards.hazards.

SIAMSIAM

Concerns / Issues to be Resolved – Concerns / Issues to be Resolved – Blending related IssuesBlending related Issues

• Usually, vehicle manufacturers blends ethanol by simple mixing at ambient temperature.

• Blending at refineries are through some sophisticated controlled systems such as “in-line blenders” (or) “splash blenders” to control any water absorption into fuel.

• Government need to notify rules related to place of blending i.e., at refineries (or) at dealers & method for ethanol blending, i.e., splash blending (or) in-line blending, etc.

• There should be some control on the quality of ethanol fuel if ethanol is directly blended with gasoline in tankers.

• Since ethanol distilleries are available locally in many districts, blending of ethanol is done at dealers site instead of transporting to refineries & again bringing back as ethanol fuel to dealers. This needs review.

E10 Fuel

Fuel Station Storage Tank

ANHYDROUSETHANOL

GASOLINE

90%

Automatic in-line blending

10%

SIAMSIAM

Concerns / Issues to be Resolved – Concerns / Issues to be Resolved – Taxation IssuesTaxation Issues

States have different tax structures for Ethanol.States have different tax structures for Ethanol.

Different Taxes & Levies applicable to Denatured Ethanol are:Different Taxes & Levies applicable to Denatured Ethanol are: Central Excise DutyCentral Excise Duty

State Excise DutyState Excise Duty

Sales TaxSales Tax

Surcharge on Sales taxSurcharge on Sales tax

Export Fee (between one State to another State)Export Fee (between one State to another State)

Import Fee (when imported from another State)Import Fee (when imported from another State)

Permit FeePermit Fee

Licence FeeLicence Fee

Privilege Fee (in Karnataka)Privilege Fee (in Karnataka)

Turn-over tax (in Maharashtra)Turn-over tax (in Maharashtra)

Administration FeeAdministration Fee

Central Govt need to notify ethanol as “declared good” under Central Central Govt need to notify ethanol as “declared good” under Central Sales Tax Act, 1956 to have uniform taxation throughout India.Sales Tax Act, 1956 to have uniform taxation throughout India.

SIAMSIAM

Concerns / Issues to be Resolved – Concerns / Issues to be Resolved – LabellingLabelling

Ethanol blended petrol to be identified by a suitable “Label” at the Ethanol blended petrol to be identified by a suitable “Label” at the dispensing stations.dispensing stations.

Examples of E10 Labelling followed in USA, Brazil and Australia.Examples of E10 Labelling followed in USA, Brazil and Australia.

AustraliaAustraliaUSAUSA USAUSA BrazilBrazil

SIAMSIAM

SIAM’s Demand for E10 Fuel in IndiaSIAM’s Demand for E10 Fuel in India Separate Dispensing at petrol-pumpsSeparate Dispensing at petrol-pumps

Same Pricing as petrolSame Pricing as petrol

Throughout the year Availability throughout Throughout the year Availability throughout IndiaIndia

Ethanol Labelling at the point-of-saleEthanol Labelling at the point-of-sale

On-line blending instead of splash blendingOn-line blending instead of splash blending

Sufficient lead-time to SIAMSufficient lead-time to SIAM

SIAMSIAM

THANKSTHANKS