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Consul-General of India in São Paulo


Ethanol in India

I will start with a comparison between India and Brazil. In the process, I will explain where India lags and where Brazil is ahead in terms of development and then comment on what in our view can be done. Looking at the figures on world activities, one sees that Brazil controls 20% of the activities with sugar and 35% with ethanol, whereas India controls 10% with sugar and 4% with ethanol. This is so because of the shortage of land.

As in China, in India too we suffer from the shortage of land and the explosion of the population, so all the land that could be cultivated is being used. So, this is one of the problems we face when contrasting these figures. You see, what we have started, is to do what Japan has already done. We introduced the E5, which is 5% of ethanol.

We started now and our government has decided that by the end of this year or the beginning of next year, this program will be compulsory. By 2020, we will gradually go to 10, 15 and then 20%. That is a policy issue. Brazil has a start and we were very late. We started thinking about introducing ethanol in 2000, but as we also have different states in the union, and there was disagreement about taxes and the use of ethanol, we only made the final decision this year.

The government set the minimum price of a liter of ethanol at 27 rupees, the equivalent to about R$ 1.00. When one looks at land availability in India, all the 169 million acres of available land are being used. There is no additional scope of land specifically to be earmarked for ethanol. If it has to be set aside for ethanol, then some agricultural activity has to be eliminated to make room for ethanol.

This is very difficult in our country, because it would be choosing between a necessity and a luxury. We cannot have ethanol made from corn. The only way to have ethanol is making it from sugarcane, but from sugarcane we produce barely enough sugar for our more than 1.14 billion people. So, the debate has been ongoing, while we still are faced with the question of what to do to implement our ethanol policy, how to start producing ethanol, and how to acquire land, all of which is a difficult proposition.

Sugarcane is planted in areas where water is abundant and there is little risk of variation in the rainfall factor. Water supply has become more difficult with global warming and erratic monsoons. We are trying to harness water energy. We are trying to build more dams so that we can use the water in times of need, but this will take a while.

In terms of the cost of producing sugar, in Brazil it was minimal, while in India it was almost one and a half times that of Brazil, albeit India is more labor intensive. Nevertheless, because the cost of energy is high, there is relative shortage of energy, so the cost of production is higher. Comparing the areas planted with sugarcane in the two countries, in 1992, they were roughly equivalent.

But, after a few years, Brazil had gone from 4.2 to 6.2 million hectares, while India went from 3.8 to only 4.2 million hectares. This occurred simply because we lack available land. Plantation productivity also varied, more favorably for Brazil. In 1992, plantation productivity was slightly higher in India, where it went from 66 tons per hectare to 67 tons 14 years later, while Brazil’s went from 65 to 74 tons per hectare.

In terms of the crushing days index evolution, in the last 5 years, in Brazil it increased considerably, from 125 to 181 days, while in India it remained almost static, having gone from 139 to 140. The available infrastructure severely affects this index. Right now we are producing ethanol from molasses at some plants. However, the government is introducing the processing of ethanol from molasses on a large scale.

Until now, from molasses, we produce liquor – whisky, for example. But the government is gradually focusing more on the production of ethanol from molasses. In 1992, Brazil and India had comparable annual sugarcane productions. However, Brazil went from 272 million tons to 455 million in 2006, and its current figures are even more expressive, whereas in India the comparable figures were 254 and 281 million tons.

Here again, one can see that production is a function of the availability of land, expressed in terms of productivity. New methods may increase ethanol production in India. Chemical processes instead of milling processes have been tested in Brazil, but in India this is yet to be realized, yet to be conceptualized. Indian ethanol production was mostly from molasses, but now as Indians start consuming less sugar, we can produce more ethanol.

One comment I would like to make relates to the shortage of land: India is trying different alternatives to produce fuel - like jatropha on arid lands, and wind energy – we are very good at wind energy and we are actually also active in Brazil in this field. Also in solar energy, because India has abundant sunshine. We are also trying with biomass, human and animal waste and household garbage – we have started running power plants on household waste and started using compressed natural gas in public transportation vehicles and pure hydrogen gas.  

A final comment: In his speech, Mr. Tarcisio Mascarim said that Brazil should sell mills and equipment, along with the respective funding. A very good idea, provided you also share the technology, so as to not become a colonial partner. I think the BRIC countries and other developing countries must share technologies and experiences, since we face the same problems.