Praj CEO says mandates, not oil prices, driving ethanol demand

In India, Praj Industries CEO Shasnak Inamdar said that mandates, and not the price of oil, are driving ethanol demand.

Inamdar noted in an interview with the Business Standard that “It would not be correct to say that the price of crude oil is driving interest in ethanol because when the prices had gone upto $140 a barrel, demand for ethanol had not increased. Also, when prices fell, this did not reduce the demand for alternative fuels. The global market is currently subdued. Though the US government has advanced its renewable fuel target of 11 billion gallons from the year 2012 to 2009. In Europe, the Renewable Energy Directive mandates 10 per cent biofuel content in transport fuel by the year 2020. This entails an additional 12 to 14 billion litres capacity of bio-ethanol generation per year, globally. This means the consumption will grow by almost five times over the next 10 years and this will create excellent growth opportunities.”

Inamdar noted that 50 percent of Praj business comes from India, and said that mandates in Mexico, Thialand and Vietnam are also driving demand.

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