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Ethanol use seen growing quickly in India, not as much in Thailand

NEW YORK, Oct 26 (Reuters) - Ethanol production and consumption in India, the world’s third largest fuel market, is expected to increase quickly in coming years as the government seems keen to push the industry to higher blend rates, an industry official said on Monday.

Abinash Verma, general director for Indian Sugar Millers Association (ISMA), said plants in the country are expected to boost ethanol production from 1.9 billion liters (0.5 billion gallons) in 2020 to 3 billion liters in 2021 on the way to meet a government target of adding 10% of ethanol to gasoline by 2022. That would require an ethanol volume of 5.5 billion liters.

“The government is extremely keen in the ethanol program, it will help to develop production capacity,” said Verma in a presentation at the Datagro International Sugar & Ethanol Conference.

India is the fifth largest ethanol producer after the United States, Brazil, China and Canada. The country sees the ethanol blending program as a way to cut the oil import bill, boost international sugar prices and help reduce carbon emissions in large cities.

Verma said higher ethanol production would help to reduce the country’s sugar surpluses. Indian sugar exports mean a high cost for the government due to subsidies given to the industry to make those shipments competitive.

The ISMA official said the government wants to move to a 20% ethanol blending by 2030, what would require 10 billion to 11 billion liters of ethanol per year. Verma said there will be public financing for companies to expand ethanol production capacity.

Thailand, another large sugar and ethanol producer, is also increasing blending, but the country has cut its long-term target because it expects electric vehicles to play a larger role.

Pipat Suttiwisedsak, president of the Thai ethanol manufacturing association KTBE, said in the conference that the country has cut the blending target from 11.3 million liters per day to 7.5 million liters per day.

But since the current ethanol use is around 4.45 million liters per day, there is still room for expansion, he said. (Reporting by Marcelo Teixeira Editing by Marguerita Choy)

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