THE
JHARKHAND GAZETTE
EXTRAORDINARY
PUBLISHED BY AUTHORITY
19 KARTIK, 1944 (S)
RANCHI, THURSDAY 10TH NOVEMBER, 2022
DEPARTMENT OF INDUSTRIES
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NOTIFICATION
10th November, 2022
Jharkhand Ethanol Production Promotion Policy, 2022
Memo No. 06/U.Ni./Vividh(Niti)-12/2021……..2016……..
1. Preamble
Since the grant of statehood, Jharkhand has made sustained strides towards realising its
immense industrial potential. To supplement its innate strengths and capitalise on the
location quotient, the state has keenly worked on skill development and export
competitiveness measures. The state has promoted inclusive livelihoods augmentation
through non-conformist decentralisation of labour-intensive sectors towards rural industrial
belts by focussing on sectors such as tourism, mining, agriculture, food processing etc.
Through the Jharkhand Industrial Investment Promotion Policy 2021, the state is further
encouraging investments and sustenance creation in identified sectors such as mineral
exploration, Iron & Steel, plastics, chemicals, electricals, cement, metallurgy & automobile
components, light engineering and textiles amongst others.
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Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022
The state has progressed fast on adopting investor-friendly best practices and making doing
business
easier
to
facilitate
investments
and
handholds
employment
creations/
enhancement. Measures like Jharkhand Investment Promotion Board, efficient system of
single-window clearances, online payments, online verification, third-party& self-certification,
time-bound approvals, proactive online disclosure of information, SOPs for approvals and
deemed approvals, etc. have been adopted by majority of the departments, undertakings,
corporations and state-owned enterprises.
This policy has been drafted with the view to sustain the reform trajectory mentioned above
and further streamline the regulatory interface to make doing business a congenial
experience. The policy proposes to provide an attractive and bespoke investment package to
the ethanol production industry in the state. Due deliberations have been done to ensure that
the suite of fiscal and non-fiscal measures proposed in this policy are amongst the best in the
country, with an aim to attract and promote Ethanol centric investment in the state.
2. Ethanol Production in India
Ethanol, primarily known as common alcohol, also serves as a renewable biofuel. It is
derived largely from fermentation of sugarcane juices, type B and C molasses, damaged food
grains with high starch content such as wheat and sorghum alongside still nascent methods
like algae processing and chemical treatment of CO2 and H2O. Blending of bio ethanol with
petroleum serves a multitude of purposes including but not limited to, reduced vehicular
emissions and energy security by using renewable energy.
India has around 330 distilleries, which can produce over 4.8 billion litres of rectified spirits
(alcohol) per year. Of this total, about 166 distilleries have the capacity to distil 2.6 billion
litres of ethanol (denatured and undenatured) to be used in fuel, industrial chemicals, and
beverages. There are three categories of raw materials used to produce ethanol:
1) Sugar based - sugar cane, sugar beet, sweet sorghum etc.
2) Starch based - all types of grains including wheat, rice, corn, barley, malt etc. and
tubers such as potatoes and cassava etc.
3) Cellulose based - Agro-waste, Agro-residues, bagasse, rice-husk, straw etc.
3. Background- Government of India schemes
To increase India’s ethanol production capacity, the Government of India has recently
launched the ‘Scheme for extending financial assistance to project proponents for
enhancement of their ethanol distillation capacity or to set up distilleries for producing 1st
Generation (1G) ethanol from feed stocks such as cereals (rice, wheat, barley, corn&
sorghum), sugarcane, sugar beet etc. Key features of the scheme are mentioned below:
Eligibility
Assistance under the scheme shall be available to the entrepreneurs for:
1. Setting up grain-based distilleries/expansion of existing grain-based distilleries to produce
ethanol. However, benefits of interest subvention scheme is to be extended to only those
distilleries which are using or will be using dry milling technique to produce Dry Distillers
Grain Soluble (DDGS).
Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022 3
2. Setting up new molasses-based distilleries/expansion of existing distilleries (whether
attached to sugar mills or standalone distilleries) to produce ethanol and for installing any
method approved by Central Pollution Control Board for achieving Zero Liquid Discharge
(ZLD).
3. To set up new dual feed distilleries or to expand existing capacities of dual feed
distilleries.
4. To convert existing molasses-based distilleries (whether attached to sugar mills or
standalone distilleries) to dual feed (molasses and grain/ or any other feed stock
producing 1G Ethanol); and also to convert grain based distilleries to dual feed.
5. To set up new distilleries / expansion of existing distilleries to produce ethanol from other
feed stocks producing IG ethanol such as sugar beet, sorghum, cereals etc.
6. To install Molecular Sieve Dehydration (MSDH) column to convert rectified spirit to
ethanol in the existing distilleries.
Assistance under the Scheme
1. Interest subvention @ 6% per annum or 50% of rate of interest charged by banks/
National Cooperative Development Corporation (NCDC)/ Indian Renewable Energy
Development Agency Limited (IREDA)/ Non-Banking Financial Companies (NBFCs)/any
other financial institutions which are eligible for re-finance from NABARD, whichever is
lower, on the loans to be extended by banks/ NCDC/ IREDA/ NBFCs/ any other financial
institutions which are eligible for re-finance from NABARD, shall be borne by the Central
Government for five years including one year moratorium against the loan availed by
project proponents.
2. Interest subvention under the scheme shall be provided on loan amount sanctioned and
disbursed in respect of each project based on the proposed capacity, limited to the in-
principle approval by Department of Food and Public Distribution (DFPD).
3. Interest subvention would be available to only those distilleries which will supply at least
75% of ethanol produced from the added distillation capacity to OMCs for blending with
petrol.
4. Assistance shall not be available to sugar mills and distilleries which have availed benefits
under any other scheme of Central Government for the same project.
5. In case of grain-based distilleries, interest subvention would be applicable only if they are
using or will be using dry milling technique to produce DDGS.
Additionally, to increase indigenous production of ethanol, Government has took multiple
interventions including, administered price mechanism, opening alternate route for ethanol
production, amendment to Industries (Development & Regulation) Act, 1951 which legislates
exclusive control of denatured ethanol by the Central Government, reduction in Goods &
Service Tax (GST) from 18% to 5%, Notification of National Policy on Biofuels – 2018,
increasing scope of raw material for ethanol procurement, interest subvention scheme for
enhancement and augmentation of the ethanol production capacity and extension of EBP
Programme to whole of India except islands of Andaman Nicobar & Lakshadweep w.e.f 01st
April, 2019. The National Policy on Biofuels, 2018 allowed production of Ethanol from B-
heavy Molasses, Sugarcane juice, and Damaged food grains like wheat, broken rice etc
which are unfit for human consumption. Regarding food grains, the National Biofuel
Coordination Committee (NBCC) was empowered to allow specific raw materials based on
the projected supply for the forthcoming year. The NBCC has subsequently allowed
production of Ethanol from Surplus rice with Food Corporation of India (FCI) and Maize.
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Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022
Government has earlier fixed target of 10% blending of fuel grade ethanol with petrol by
2022, 15% blending by 2026 & 20% blending by 2030.With a view to achieve the blending
targets, Government is making concerted efforts to further double the ethanol distillation
capacities in the country by 2024.
With the recent approved interest subvention incentives for grain distilleries, the target of
20% blending of petrol by 2025 is planned as per Expert Committee on Roadmap for Ethanol
Blending in India by 2025.
Government of India schemes/ interventions mentioned above is non-exhaustive and detail
or updates on schemes may be referred separately.
In line with the aim of Government of India, the Government of Jharkhand, through this
policy, plans to extend additional benefits to promote the growth of Bioethanol sector in the
state. The incentives proposed under this policy will be in addition to the support from the
Government of India to the manufacturing units engaged in the production of Ethanol. Also,
this policy would indirectly benefit the backward and forward linkages of the participants
linked to the production of Ethanol.
4. Policy Aim
Jharkhand Ethanol policy aims to achieve multiple outcomes such as addressing
environmental concerns, reducing import dependency and provide boost to agriculture
sector in the State.
This policy has been introduced with an aim to leverage the opportunities in Ethanol
manufacturing which offers a sustainable source of income for farmers, entrepreneurs
and workers who will be employed in the Ethanol units.
5. Policy Objectives
This policy aims to achieve the following objectives for the overall growth and development of
green-field new Ethanol manufacturing industries in the State with a goal of providing
remunerative returns to investors, farmers and all other stakeholders:
To allow production of Ethanol from all kind of feedstocks allowed under National
Policy on Biofuels, 2018 and by the National Biofuel Coordination Committee.
To promote, facilitate and financially incentivize investment in fuel-grade standalone
new/green-field Ethanol manufacturing units in Jharkhand through instituting an
enabling environment and offering fiscal incentive.
To increase incomes of farmers producing feedstock/ raw material which may be used
for Ethanol manufacturing.
To create local employment opportunities through promotion of new Ethanol
industries.
To increase the production of grains used in production of ethanol and providing
forward and backward linkage between farmer and industries through SFC and FCI.
Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022 5
6. Policy Benefit
Ethanol manufacturing in the State using Sugarcane Juice, Maize and Broken Rice as
feedstock has significant potential for growth. The National Policy on Biofuels, 2018 and
subsequent pronouncements by the Government of India offer a very conducive regulatory
and institutional eco-system for sustainable growth of Ethanol manufacturing in States such
as Jharkhand which is endowed with large number of feed-stocks such as Sugarcane, Maize,
Rice, etc.
a. Boost to State economy
o Agriculture sector will get boost because of additional production of grains.
o Less dependence on imports and cheaper cost of production of ethanol will bring
down the prices of fuels. ·
o Revenues to the State.
b. Benefit to Farmers
o Manufacturing of Ethanol from grains will also help the farmers to get good support
price for their produce in the form of grains.
o Spent wash will be treated in decanter followed by Multiple Effect Evaporator &
then in Dryer.
o The output from Dryer is known as Distillers Dried Grain Soluble (DDGS). It is of
very high in protein content (around 35%). It will be used as Cattle feed by
farmers.
c. Environmental Benefits with the project
o Significant reduction in fuel consumption, hence conservation of fuel.
o Significant reduction in air pollution.
o It reduces greenhouse gas emissions by up to 59 percent relative to gasoline.
o Even adding as little as 10 percent ethanol to gasoline significantly reduces tail
pipe emissions of carbon monoxide and non-combusted hydrocarbons.
o Less water consumption per KLD of Ethanol production as compared to Molasses.
o Less steam consumption per KLD of Ethanol production as compared to
Molasses.
o Recycling of significant portion of spent wash.
o Zero Liquid discharge system will be adopted and is approved by Central Pollution
Control Board.
o Co-generation power within the premises.
o This eliminates the external power requirement and the transmission losses.
d. Socio-Economic Benefits
o Employment generation to the local people.
o Socio-economic Developmental activities will be carried out in the area with the
implementation of the project. 2% of the project cost will be earmarked for socio-
economic developmental activities in the area.
e. Infrastructure Support
o The Jharkhand Industrial and Investment Promotion Policy 2021 highlighted that
the government is committed to create high quality infrastructure in all the parks
and industrial areas throughout the state. Government would ensure the creation
of Special Infrastructure for Ethanol Production required by the industry.
7. Coverage and Scope
a. Eligibility for type of Units
100% ethanol (Biofuel) production units shall be eligible for incentive under this policy.
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Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022
b. Eligibility for type of feedstocks
Ethanol production from all feedstocks permitted under National Policy on Biofuels,
2018. Subsequent permission of any additional feedstock for Ethanol production by
National Biofuel Coordination Committee will be automatically allowed for Ethanol
production in the State of Jharkhand.
Notes:
a. Other eligibility conditions and incentives mentioned under Jharkhand Industrial
Investment Promotion Policy, 2021 shall also be considered for eligibility under this
policy.
b. Only those Green-field standalone Ethanol manufacturing units shall be eligible for
financial assistance under this Policy which are producing fuel-grade Ethanol and are
supplying 100% of their Ethanol to Oil Manufacturing Companies (OMCs) under
Ethanol Blending Petrol Programme (EBP) of Government of India.
8. Guiding Principles
1. These provisions / principles shall be applicable to all eligible projects / units under this
policy.
2. This policy shall come into force from the date of its notification in the official gazette.
The said date shall be considered as effective date of this policy from which its
provisions shall come into force and will be applicable for a period of five (05) years.
3. Incentive under this Policy shall be offered after commencement of commercial
production by the Unit. Date of Commencement of commercial production should fall
within the policy period i.e., between date of notification in the official gazette and date
of expiry of this policy.
4. Incentive under this Policy to the eligible Units covered under the Clause 7 will be in
addition to the wide range of benefits eligible under the Jharkhand Industrial
Investment Promotion Policy, 2021. However, the maximum limit of incentive under
this Policy shall be subject to capping as per Clause 9 of this Policy.
5. For the purpose of calculation of capital subsidy under this policy, the value of Fixed
Capital Investment shall be that considered as part of Approved project cost under
Jharkhand Industrial Investment Promotion Policy, 2021.
6. Only those green-field standalone Ethanol Units which are set-up on ZLD (Zero Liquid
Discharge) basis shall be considered under this Policy. The cost of setting-up Effluent
Treatment Plant (ETP) shall be included within the Approved project Cost.
7. Cost incurred in setting-up Captive power plant by eligible green-field standalone
Ethanol units shall be included within the Approved project cost.
8. Special Class Investors: In case of Scheduled Castes (SC), Scheduled Tribes (ST),
Women, Differently-abled, the maximum limit of incentive under this Policy shall be
increased by additional 5%.
9. Land will be allotted on priority basis to ethanol units from Jharkhand Industrial land
bank.
9. Incentives
After the notification of this Policy, the unit as per the eligibility criteria mentioned in this policy
will be entitled to avail incentives under the following policies of the Jharkhand Government-
Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022 7
Incentives provisions proposed under Jharkhand Ethanol Production Promotion
Policy 2022
Incentives
Details
Comprehensive
Project Investment
Subsidy (CPIS)
CPIS at 25% of Investment made in fixed capital investment,
Maximum limit of Rs. 10 Cr for MSME and Rs. 30 Cr for Non-
MSME. Disbursement of CPIS will be as per JIIP Policy 2021
guidelines. SC/ST/Women/Differently abled Entrepreneurs will avail
5% additional benefit under CPIS i.e., over and above the maximum
limit of admissible subsidy under CPIS. (This additional benefit shall
be applicable only to residents of Jharkhand) For the purpose of this
clause, those persons will be eligible for benefit under SC/ST
category that are issued caste / residential certificate to this effect by
competent authority as notified by Government of Jharkhand.
Similarly, those persons will be deemed to be of differently abled
category that are certified by a competent Medical Board to have
Differently abled of more than 40%.
Stamp Duty and
Registration
Exemption
All Industrial units will enjoy 100% reimbursement of stamp duty and
registration fee for land directly purchased from the raiyats / acquired
through consent award (lessee of JIADA / industrial parks will not be
eligible for this benefits). This facility will be granted only for the first
transaction for a particular plot of land.
Land Cost
Only units producing 100% ethanol (Biofuel) will be eligible for 50%
rebate on prevailing land lease premium on the land allotted by the
State Government agencies and land will be provided to units as
upfront or in 10 equal instalments in five years will be applicable
only for those units to whom the land is allotted within a period of
two years from the Date of Notification of this policy and commence
their production within a period of 15 months from the date of land
allotment.
Interest subvention
incentive
New MSME units and non MSME sector units shall be entitled to
interest subsidy for timely payment @ 6% per annum on total loan
availed from public financial institutions / Banks for period of five
years from the date of Commercial Production subject to total
maximum limit of:
Rs. 15 Lakhs for Micro Enterprises
Rs. 50Lakhs for Small Enterprises
Rs. 1 crore for Medium Enterprises
Rs. 3 Crores for non-MSME Sector units
Early Bird Subsidy
Additional 5% of the Comprehensive Project Investment Subsidy
(CPIS) shall be provided in addition to the other incentives mentioned
in this Policy.
Note: The 'Fixed Capital Investment' means an investment made in building (not applicable
for Non-MSME), plant and machinery as well as productive assets of permanent nature such
as tools, jigs, fixtures, dies, crane, electrification except DG Set and pollution control
equipment.
Apart from above, additional incentives proposed in this policy
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Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022
Skill development subsidy
One-time Skill development subsidy of Rs 13,000 per employee. This incentive will be
applicable for training of employees/ staffs who are domicile of Jharkhand.
10. Dovetailing with Central and State Government policies and schemes
I.
Dovetailing with Central Government policies and schemes would be allowed under
the Policy. Investors shall have to submit declaration of types and quantum of
incentives availed/ to be availed by them under Central Government policies.
II.
Dovetailing with Jharkhand Industrial Investment Promotion Policy, 2021 would be
allowed under the policy. Dovetailing with State Government policies and schemes
other than Jharkhand Industrial Investment Promotion Policy, 2021 would be allowed
under the policy subject to the condition that the unit shall not avail subsidy against the
same asset under this policy and such other policy.
III.
In case Investors avail any subsidy under Central Government schemes, the amount
of subsidy so availed/ to be availed by them will be deducted from the corresponding
subsidy admissible under this Policy. For example – If an Investor avails 6% interest
subvention subsidy under a Central Government Scheme and the applicable
interest rate on term loan availed by them is 10%, then balance 4% would be
admissible under this policy, subject to the upper limit specified in the Policy.
11. Special incentive package for Special class entrepreneurs
In order to promote Scheduled Castes (SC), Scheduled Tribes (ST), Women and
Differently-abled entrepreneurs in the State, they shall be entitled for additional subsidy
under the policy subject to the condition that entrepreneurs under these categories shall
hold 100% stake in the Company/ Firm promoting the Unit.
12. Submission of application under this Policy
Investors may log onto the Jharkhand’s Single Window Portal and apply for various
approvals through the Common Application Form(CAF).The Single Window Cell shall
monitor all projects and help in their facilitation in a time-bound manner.
For availing incentives under this policy, the Units will submit either (i) a copy of
Tripartite agreement entered into among the Unit, their Bankers and Oil Marketing
Companies (OMCs), or (ii) purchase order from Oil Marketing Companies (OMCs) for
sourcing of Ethanol manufactured by the Unit.
13.
Policy Implementation
i.
Department of Industries, Government of Jharkhand shall be the nodal agency
responsible for implementation of this policy in the State.
ii.
Incentives under this policy shall be processed as per the provisions of Jharkhand
Industrial Investment Promotion Policy, 2021.
iii.
Units applying for incentive under this policy shall apply on the Single Window
Clearance (SWC) portal of the Department of Industries, Government of Jharkhand.
Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022 9
iv.
Government of Jharkhand will promote fuel-grade Ethanol manufacturing in the State.
For this, all NOCs, permissions and clearances required by Ethanol Manufacturing
units from the Department of Excise and Prohibition and other Departments/ Agencies
of Jharkhand Government will be provided through Single Window Clearance (SWC)
portal of the Department of Industries, Government of Jharkhand.
v.
Department of Industries shall extend hand-holding support to the Investors setting up
Ethanol manufacturing units in land allotment from Jharkhand Industrial Area
Development Authority (JIADA), land registration for private land and land use
conversion and other applicable clearances/ licences/ NOCs.
14.
Policy monitoring and grievance redressal
I.
The implementation of the policy will be reviewed from time to time and necessary
facilitation and course correction shall be undertaken as found necessary to achieve
the objectives of this policy.
II.
Department of Industries will develop web-based interaction mechanism where
suggestions and complaints can be directly addressed to the Department of Industries.
15.
Program awareness and Capacity Building
I.
Programs for creation of various levels of awareness /capacity building for self-reliance in
the field of domestic energy will be run. With this, the rural economy will be strengthened
as well as the role and importance of the bio-fuels sector will be established for self-
employment opportunities.
II.
Emphasis will be given on human resource development, training and capacity building.
For this, government and other institutions will be encouraged for various level training, to
ensure the availability of trained manpower at all levels in the bio-energy sector.
16.
General conditions
I.
As per the National Policy on Biofuels, 2018, the Bureau of Indian Standards (BIS) has
already evolved standards for bioethanol, biodiesel for standalone and blended form
applications. The Bureau of Indian Standards (BIS) has developed a standard (E.S.
15607) for Bio-diesel, which has been taken from the American standard ASTM-D-6751
and the European standard E.N. 14-14214. Apart from this, the Bureau of Indian
Standards has developed standard I.S. -2796: 2001, including 5% and 10% Bio-ethanol
Blend. Compliance will be ensured in each condition of standards set by the Bureau of
Indian Standards in the production of bio-ethanol, biodiesel, drop-in-fuel, methanol and
other bio-fuels.
II.
If any false declaration is given for the purpose of availing incentives or if incentives are
availed for a unit that was not eligible or any violation of the condition of this policy, the
amount of incentive is liable to be recovered from the date of availing such benefit along
with the interest compounded annually @ 18% per annum. In case of non-payment within
the stipulated time, the State Government may recover such amounts including interest
as arrears of land revenue.
III.
If a Unit after availing incentive under this Policy diverts the production facility to produce
any product other than fuel-grade Ethanol to be supplied to Oil Marketing Companies
under Ethanol Blending Programme of Government of India, the amount of incentive is
liable to be recovered from the date of availing such benefit along with the interest
compounded annually @ 18% per annum. In case of non-payment within the stipulated
time, the State Government may recover such amounts including interest as arrears of
land revenue.
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Jharkhand Gazette (Extraordinary), Thursday, 10th november, 2022
IV.
The units applying for the Comprehensive Project Investment Subsidy (CPIS) incentive
under this policy need to claim the incentive within 6 months of issuance of DOP. Failing
to do so will incur a penalty of 2 percent per month of approved amount of CPIS upto a
maximum of 25 percent.
Words used in this Policy shall have the same meaning as assigned to them under
Jharkhand Industrial Investment Promotion Policy, 2021 or National Policy on Biofuels, 2018, as
the context may require. All matters of interpretation/disputes shall be decided by the Additional
Chief
Secretary/
Principal
Secretary/
Secretary,
Department
of
Industries.
Such
interpretation/decision shall be final.
Industries mentioned in the negative list of Jharkhand Industrial Investment Promotion Policy,
2021 would not be eligible for any incentive under this policy. This policy will come into effect
from the date of issue of this notification and will remain in operation till five (5) Years
from the date of notification of this policy.
By the Order of the Governor of Jharkhand,
S/d iIlegible,
Principal Secretary,
Department of Industries,
Government of Jharkhand.
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