Pakistan spends significant amounts on oil imports to keep its industrial sector running, putting a heavy burden on the national treasury. However, according to WealthPK, this expense can be reduced by increasing ethanol production.
Ethanol, a biofuel that can be blended with fossil fuels, presents a promising solution.
Speaking to WealthPK, Dr. Ahmed from the University of Agriculture, Faisalabad, said, “Pakistan can manage the high cost of oil imports by focusing on ethanol blending. This will not only create jobs but also contribute to a cleaner environment.”
He emphasized the need for policymakers to introduce supportive frameworks, including incentives to address high production costs and the limited availability of suitable feedstocks.
Citing the Pakistan Economic Survey, Dr. Ahmed noted that the transport sector is a major consumer of petroleum products, consuming approximately 13.6 million metric tonnes (MMT) of petroleum in the fiscal year 2023-24. In the same period, 5.28 million metric tonnes of gasoline and 2.37 million metric tonnes of diesel were imported to sustain industrial activity.
Discussing the potential for ethanol production, Dr. Ahmed highlighted that Pakistan has abundant resources, particularly sugarcane and rice straw, to produce ethanol. He urged the government to support stakeholders in adopting modern technologies like enzymatic hydrolysis, which would reduce production costs and increase ethanol yields. Blending ethanol could also help reduce greenhouse gas emissions and create domestic value chains.
Dr. Ahmed suggested learning from countries like Brazil and the United States to develop effective ethanol programs. He stressed that international partnerships could facilitate technology transfers and attract investment.
“To meet blending targets, collaboration between the government, industry, and research institutions is essential. Without this unity, we cannot overcome challenges or capitalize on opportunities,” he said.
Asif Ali, a sugarcane dealer, told WealthPK that the sugar industry has tremendous potential for ethanol production. However, he pointed out that current blending mandates fall short of requirements. He also noted that outdated machinery and limited access to feedstocks have increased production costs. He emphasized the need to diversify feedstocks, incorporating rice straw and corn to enhance ethanol output.
Ali believed that ethanol blending would create new opportunities for millers, boosting their profitability and reducing Pakistan’s reliance on imported oil. However, he stressed the need for government incentives and tax breaks to enable millers to take full advantage of these opportunities.
Waqar Ahmad, a progressive farmer, said that rising energy costs have made it challenging for farmers to make ends meet.
“We must think innovatively and promote renewable energy sources like ethanol. Farmers are ready to partner with the government to reduce oil imports, but they need supportive policies and incentives to strengthen their financial position,” he added.
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