Bio-ethanol to help govt reach 10% blending target by 2022: Praj

Praj Industries has launched a 'Green Fund' that will help it take up projects to make second-generation ethanol projects -- a move it says will help the government achieve its target of mixing automotive fuels with 10 percent ethanol by 2022.An immense shortage of the fuel, largely because manufacture of first-generation ethanol (derived from sugars and vegetable oils) faces serious limitations, has emerged and experts believe that the second-generation "bio-ethanol" (made from biomass, agricultural residues and waste) is the answer to this.In an interview with CNBC-TV18, Pramod Chaudhari, Executive Chairman of Praj, explained how the move could help cut down on fossil fuel usage by allowing more ethanol blending and the opportunity this presents to the company.Below is the transcript of Pramod Chaudhari’s interview to Reema Tendulkar and Nigel D’souza on CNBC-TV18.Reema: While we understand that this development is a big positive for the country per se, but for your company, your shareholders want to know by you participating in this, how does it benefit the company? What could be the extent of orders Praj Industries could see?A: This development was very important from the point of view of creating additional capacity for bio-ethanol production. The first generation capacity was almost reaching to the end and now the mission, which was declared by the current government to reach 10 percent blending, they require additional ethanol and that is why making ethanol by this agri residue, which is called second generation technology route is very important.This requirement to be met, we require more than 50-60 plants and Praj has developed the necessary technology, first of its kind from end-to-end basis. We have already run and demonstrated this at our research and development (R&D) centre and we are working on a complete commercial package for this. So, these projects, which are likely to come up in India, are going to be a big opportunity for Praj.Nigel: That point is well taken. Big opportunity for Praj, but in the last year, the targeted ethanol blending was around 5 percent.A: It has reached 4 percent.Nigel: Yes, that was the target and we are already three months into this year. Now, you are talking about 10 percent, what is your realistic assumption? What kind of a number can we reach? Can we do at least 7-8 percent?A: Now, with this new technology, with new stock which is agricultural residue, you can reach even more than 10 percent. They have declared that by 2022, they have to reach 10 percent. And that is why this 10 percent blending in ethanol on the increased consumption is very important and for that, this is the main source of raw material and technology to reach that target.For entire interview, watch accompanying video...