India brings forward target of 20% ethanol-blending with gasoline

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NEW DELHI, Jan 14 (Reuters) - India plans to achieve 20% ethanol-blending with gasoline by 2025, five years ahead of its previous target, to help reduce its dependence on costly oil imports, the government said on Thursday.

Last year the government had set a target of reaching 10% ethanol-blending by 2022 - meaning 10% of ethanol mixed with 90% of gasoline - and 20% by 2030.

India is the world's third biggest oil importer, relying on foreign suppliers to meet more than 80% of its demand.

In the current ethanol supply year, which started in October, India plans to have 8.5% ethanol-blending with gasoline. This would be raised to 10% by mixing in 4 billion litres of ethanol by 2022, the statement said.

"To achieve 20% blending by 2025, and to meet the requirement of the chemical and other sectors, about 12 billion litres of alcohol/ethanol would be required," the government said on Thursday.

The sugar industry will divert 6 million tonnes of surplus sugar to produce 7 billion litres of the ethanol needed, the government added, while the other 5 billion litres of ethanol will be produced from excess grain.

Last month the cabinet announced a scheme to attract about 400 billion rupees ($5.5 billion) in private investment to expand India's capacity to produce ethanol from sugar and grains.

Moves to increase ethanol content are also aimed at providing an alternate source of revenue for sugar mills as India will not be entitled to extend sugar export subsidies beyond 2023, under the World Trade Organization Agreement on Agriculture.

($1 = 73.0707 Indian rupees)

Reporting by Aftab Ahmed

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