Bangladesh and Sri Lanka's Interest in Ethanol: A Boon for Bamboo Growers and Entrepreneurs in Assam

The bio-refinery's demand for bamboo has opened doors for local farmers and entrepreneurs to supply the necessary raw materials.
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The growing demand for ethanol in Bangladesh and Sri Lanka presents a significant opportunity for bamboo growers and entrepreneurs in Assam and its neighboring states. With the region's first bio-refinery, set up by Numaligarh Refinery Limited (NRL) in collaboration with Assam Bio-Refinery Private Limited, poised to use bamboo as a feedstock for ethanol production, this development is expected to drive the commercial cultivation of bamboo. The bio-refinery will require an estimated 5 lakh tonnes of bamboo annually to produce around 6 crore liters of ethanol each year, creating a substantial market for the region’s bamboo.

Key Opportunities for Bamboo Growers

The bio-refinery's demand for bamboo has opened doors for local farmers and entrepreneurs to supply the necessary raw materials. As the refinery will require bamboo chips of specific sizes, local entrepreneurs will play a crucial role in processing the bamboo before it is supplied. However, the price offered for bamboo will be a determining factor in encouraging traditional bamboo growers to scale up their production to meet the refinery's needs. Bamboo cultivation, which has often been a secondary activity for farmers, may need to be developed on a commercial scale for long-term sustainability.

Growing Domestic Ethanol Demand

The growing demand for ethanol within India further amplifies the significance of this bio-refinery. India achieved the target of 10% ethanol blending with petrol ahead of schedule, in June 2022, well before the official deadline set for November 2022. This achievement is part of a broader plan to blend 20% ethanol with petrol by 2025, earlier than initially planned. The Central Government’s push for increased ethanol blending is driving up the domestic demand, as evidenced by the substantial increase in ethanol procurement by public sector Oil Marketing Companies—from 38 crore liters in 2014-15 to 452 crore liters in 2021-22.

Additionally, the “Roadmap for Ethanol Blending in India 2020-2025,” drafted by NITI Aayog and the Ministry of Petroleum and Natural Gas, highlights the potential savings of Rs 30,000 crore annually by reducing the country’s crude oil import bill. To meet the 20% blending target, India will need to produce 1,016 crore liters of ethanol, considering the growth in vehicle numbers. The roadmap also notes that most current vehicles are designed for 5-10% ethanol blending, and the required adjustments for 20% blending will involve an incremental cost of Rs 1,000 to Rs 5,000 for two-wheelers and four-wheelers. However, the report suggests that this cost won’t be a significant barrier to market acceptance.

Bamboo and the National Bamboo Mission

The National Bamboo Mission (NBM), restructured in 2018-19 as a Centrally Sponsored Scheme, focuses on expanding bamboo plantations, particularly in non-government and private lands. It aims to create a comprehensive value chain for the bamboo sector, linking growers with industry and promoting quality bamboo cultivation. This mission, which includes the establishment of hi-tech bamboo nurseries, plays a pivotal role in ensuring the availability of quality bamboo feedstock for the bio-refinery.

The northeastern states of India, particularly Assam, are home to more than half of the country’s bamboo resources. Data from the India State of Forest Report 2021 shows that Assam’s bamboo-bearing areas increased by 134 square kilometers between 2019 and 2021. This growing resource base, combined with the bio-refinery’s requirement for bamboo, creates a promising future for bamboo cultivation in the region.

The Challenges: Ensuring Sustainable Supply

The bio-refinery’s long-term success will depend on several critical factors. One of the most important is ensuring a steady and reliable supply of bamboo within a commercially viable distance from the refinery. Local entrepreneurs will be responsible for processing the bamboo into the required-sized chips, which adds another layer of complexity to the supply chain. Ensuring fair prices for growers and entrepreneurs will be essential to maintaining a sustainable supply of bamboo.

Additionally, the bio-refinery must navigate the lessons learned from past failures, such as the closure of paper mills that relied on bamboo feedstock but could not sustain operations. Managing both supply and demand effectively, backed by sound scientific research, financial management, and timely market interventions, will be crucial for the refinery’s longevity.

A Bright Future for Bamboo in Assam

The establishment of the bio-refinery in Assam represents a significant step forward for both the region’s bamboo sector and India’s biofuel industry. The convergence of the bamboo mission’s objectives with the bio-refinery’s needs presents an opportunity for local communities to benefit from new, sustainable livelihood options. By meeting the growing demand for ethanol both domestically and internationally, the bamboo sector could thrive, fostering economic growth and environmental sustainability in the region.

The successful operation of the bio-refinery would not only demonstrate the potential of bamboo as a renewable resource but also provide a model for integrating traditional livelihoods with modern industrial needs. With strategic investments in infrastructure, research, and market linkages, Assam and its neighboring states can lead the way in sustainable bamboo cultivation, contributing to India’s ambitious ethanol blending targets and creating new economic opportunities for local communities.

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