Pakistan spends hefty amounts on oil import to keep its industrial wheel going, putting a big drain on the state kitty. However, the cost of imported oil can be curtailed by boosting ethanol production, reports WealthPK.
Ethanol, a biofuel that can be blended with fossil fuels, offers a silver lining.
Talking to WealthPK, Dr. Ahmed from the University of Agriculture, Faisalabad, said, “Pakistan can easily handle the hefty cost of imported oil by focusing on ethanol blending. This will not only help the government create jobs but also contribute to a cleaner environment.”
He said the policymakers will have to introduce a supportive policy framework by announcing incentives to tackle the high production costs and limited availability of suitable feedstocks.
Quoting the Pakistan Economic Survey, he said the transport sector of Pakistan was a major consumer of petroleum products. This sector has consumed approximately 13.6 million metric tonnes (MMT) of petroleum products in the Fiscal Year 2023-24. During the same period, 5.28 million metric tons of gasoline and 2.37 million metric tons of diesel oil were bought to keep the industrial wheel going.
Discussing the potential of ethanol production, Dr Ahmed said Pakistan had a goldmine for producing ethanol, especially from sugarcane and rice straw. The government should cooperate with the stakeholders in adopting modern technology like enzymatic hydrolysis, which will reduce the production cost and boost ethanol yield. Blending can contribute towards reducing greenhouse gas emissions and creating domestic value chains.
Dr Ahmed also stressed the need to learn from the experiences of different countries, like Brazil and the United States, to evolve effective ethanol programs. He said the country must strive for international partnerships that could open doors for technology transfer and investments.
“To achieve the desired blending targets, the government, industry, and research institutions must be on the same page. Without collaboration, we cannot address the emerging challenges and leverage opportunities,” he said.
Asif Ali, a sugarcane dealer, told WealthPK that the sugar industry had the exceptional potential to produce ethanol. However, he noted that the current blending mandate fell short of the desired requirements. Our production costs are high due to the outdated machinery and limited access to feedstocks. Apart from sugarcane, we must expand our feedstock options and include rice straw and corn to increase ethanol production.
He believed ethanol blending will open new horizons for the millers, allowing them to increase their profitability and reduce the country’s reliance on imported oil. However, to take full advantage of the opportunity, the government must ensure incentives and tax breaks for the millers.
Waqar Ahmad, a progressive farmer, said the high cost of energy had made it difficult for the farmers to make (both) ends meet.
“We need to think outside the box and promote renewable energy sources like ethanol. Our farmers are ready to join hands with the government to cut reliance on imported oil but they need friendly policies and incentives to solidify their financial standing,” he added.