Bio-fuel sector to benefit from govt efforts to cut emission

In the coming new calendar year, the bio-fuel sector is expected to see a lot of activity due to emission reduction plans of the government. Many public sector undertakings such as Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) are planning to set up second generation (2G) ethanol manufacturing plants from non-edible agricultural waste. Leading the way, another state-run entity Hindustan Petroleum Corporation Ltd (HPCL) has already kicked off its first step towards building its ethanol refinery in Punjab at a cost of Rs 600 crore. The plant will produce ethanol from sugarcane and other agricultural residues for doping in petrol. IOC and BPCL will be setting up ethanol plant with the help of Praj Industries. The two OMCs along with HPCL are expected to spend around Rs 5,000 crore to set up multiple ethanol plants.

With the second generation of bio-fuels, Praj Industries will benefit from traction in domestic market. After bio-ethanol, the company is looking at the whole cycle bio-CNG from the waste of this plant so that it can set up a complete bio-refinery.
As per industry sources, two units to be set up for IOC and BPCL will be commissioned in the beginning of 2019. Further, the government has said that it is working on a new policy for non-conventional resources that would increase ethanol blending in petrol to 22.5 per cent and in diesel to 15 per cent, resulting in potential saving of Rs 7 trillion (Rs 7,00,000 crore) on its crude oil imports.

Praj Industries is currently trading at Rs 78 on the BSE, recovering from low of Rs 75.8 on 25 November, 2016.