The Bangladesh High Commission in New Delhi has suggested the government explore the possibility of introducing ethanol-blended petroleum in Bangladesh following India's success in achieving a 10- per-cent target of ethanol-blended petrol.
The High Commission has requested the government to take necessary steps in this regard. However, it also pointed out potential negative impacts on food security and availability if food items are diverted to the fuel industry.
Ethanol-blended fuel involves mixing petrol with a certain percentage of locally produced ethanol derived from sugarcane, food grains and crops. This blended fuel is slightly cheaper than crude oil and petroleum, resulting in reduced reliance on imported petrol.
The High Commission acknowledges that ensuring an adequate volume of raw materials for ethanol production remains a concern.
Addressing the concerns, the High Commission suggests that producing biofuel from food waste could alleviate the issue of food security.
Besides, the High Commission expressed concern about the growing demand for CNG-run vehicles, electric cars and hybrid vehicles, and noted that this will go up further in the near future.
The High Commission, however, believes that petroleum-based vehicles will continue to dominate new vehicle sales in the medium term.
The Bangladesh embassy suggested that state-run petroleum distribution companies, including Padma Oil, Meghna Petroleum and Jamuna Oil Company, handle ethanol blending.
The country spends nearly Tk 443 billion annually on importing crude and refined petroleum products.
A senior official from the Bangladesh Petroleum Corporation (BPC) said that implementing the programme could result in significant foreign currency savings, but there have been no studies conducted on the exact amount.
Another BPC official mentioned that the government has not made any decisions regarding ethanol blending.
Currently, Indian petroleum marketing companies are responsible for ethanol blending.
India, the world's third-largest oil-consuming and importing country, has successfully achieved a 10 per cent ethanol blending target and now aims to double it to 20 per cent by 2025.
India is the fifth largest producer of ethanol, with the US, Brazil, the EU and China ranking higher.
India imports over 85 per cent of its petroleum, while ethanol blending has reduced the import dependency and already saved billions of dollars. In 2020-21, India's net petroleum import was 185 million tonnes at a cost of US$ 551 billion.
An Indian Niti Aayog (the apex think tank of the Indian government) paper claims that the achievement has not only augmented India's energy security but also translated into a foreign currency savings impact of over Rs 41500 crores, reduced Green House Gas emissions of 2.7 million tonnes and also led to the expeditious payment of over Rs 40,600 crores (approx. USD 5.0 billion) to farmers in the course of the last eight-year.
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