Hindustan Petroleum Corporation (HPCL) is investing over ₹14 billion (~$168.12 million) to build a Second Generation (2G) bio-refinery plant in Bathinda, Punjab, using paddy straw to produce ethanol as part of the government’s Ethanol Blending Program (EBP).

About 100,000 Metric Tons (MT) of biomass will be secured for the 2G ethanol plant this year. The plant is set to be commissioned by the end of this year.

The plant is designed to produce 100 kiloliters of ethanol per day, using 570 MT of paddy straw daily (equivalent to 200,000 MT annually) when it operates at full capacity.

The Commission for Air Quality Management (CAQM) oversees the plant’s construction progress and recently conducted a review.

HPCL is collaborating with the Punjab state government to streamline biomass procurement. Agreements with self-help groups in Bathinda and nearby areas have mobilized 23,000 MT of paddy straw.

The plant is expected to reduce paddy straw burning in Punjab, especially in the Bathinda district. Paddy stubble burning cases in Bathinda have dropped from 880 in 2022 to 294 between September 15 and November 1 this year.

In June, the government extended the loan disbursement timeline for ethanol projects until September 30, 2023, offering a 6% interest subvention for five years to accommodate the complex application processing and coordination required with multiple agencies.

This supports the expansion of ethanol production capacity to 12.44 billion liters, aiming to strengthen the agricultural economy, reduce reliance on imported fossil fuels, and achieve a 20% blending rate by 2025.

Last May, HPCL, BPCL, and IOCL collaboratively established a long-term purchase agreement for upcoming ethanol plants across India. They signed tripartite-cum-escrow agreements with major banks to ensure that payments received by the ethanol plants service bank debt and enable ethanol blending with petrol under the EBP Program.