Looking to add specialty chemicals to our portfolio: Samir S. Somaiya, Chairman and Managing Director, Godavari Biorefineries

INDIA CHEMICAL NEWS | June 14, 2024

How does Godavari Biorefineries contribute to development and production of sustainable bio based products?
Biorefinery means conversion of an agricultural biomass into food, energy, biofuels, compressed biogas and even electricity. It also means conversion of biomass into chemicals and materials.

Godavari has always been pioneering the conversion of biomass into these products. In the 1940s, it was sugarcane cultivation and sugar production. In the 1950s, it was the conversion of molasses to Ethanol. In the 1960s, we started small in making chemicals from Ethanol. In the 1990s, we were one of six projects in the country to be chosen by USAID to show how climate change can be mitigated by greenhouse gas mitigation projects. We were awarded a grant from the USAID to demonstrate the making of surplus power from bagasse. In the recent past, we were among the first companies to demonstrate the use of sugarcane juice/syrup as a feedstock for making Ethanol in India.

The company received a Rs. 15 crore grant from the Department of Science and Technology. Can you please share the details?
In biorefining, there is a need to have access to biomass and the question that we are trying to ask is how it can be done with reasonable cost which refers to Capex and Opex. Sugarcane processing companies save bagasse (8-9% on cane) and so have abundant feedstocks. Secondly, the distilleries make Ethanol seasonally. They have idle capacity. The idea is to use this idle capacity with a bolt-on facility to make Ethanol from bagasse with the addition of bagasse pre-treatment. So, there is no need to create a new facility all the way from biomass pre-treatment, collection, pretreatment, fermentation and purification. We just need the treatment of the biomass to convert to sugar for fermentation. This is the whole concept and we want to try and pioneer and see how it is possible.

When do you see this finally shaping up?
To be able to demonstrate this in a reasonable manner, a policy environment needs to be in place. The creation of PPAs (Power Purchase Agreements) enabled sugar mills to install power plants. Similarly, a mandate for Ethanol blending with a declared price for juice/syrup helped create that investment). Similarly, a policy framework for 2G Ethanol will help spur investment. The moment we create a framework and a market, only will then one allow or incubate innovation to make it happen.

How favourable government policy is accelerating growth of bioenergy, Ethanol and bio-based speciality chemicals? At the G20 Summit, many nations came together to create an association for Ethanol. How will this help companies like you in the long run?
One is the Indian context and the other is the global context. In India, there is a need to have energy security that supplements and substitutes the energy that the country imports from overseas. India is rich in biomass and the policies have to encourage the conversion of biomass. The government mandates Ethanol blending and is targeting 20% blending in the next couple of years. Similarly, there is a mandate that is going to come for Compressed Biogas (CBG).

India has to look at it also from an energy security as well as climate change angle. India is committed to achieve net zero by 2070. Moreover, India has a lot of small farmers and their income security is necessary and this is helped by a dual product from sugarcane if it can go to sugar and Ethanol. The infamous sugar cycle that used to have big surpluses and deficits gets insulated because these surpluses can go into the Ethanol.

Are you also looking at focusing on CBG? How many plants are you planning to set up?
We will certainly do that and at the moment we are exploring the setting up of a CBG plant.

How is Godavari contributing to the Government of India's ambition on these fronts?
As mentioned, we were the first off the post when the policy of Ethanol from sugar cane juicer syrup was announced.

We increased our Ethanol capacity from 200,000 to 320,000 litres per day. Later, we increased the capacity from 320,000 to 400,000 litres per day and now we have gone from 400,000 to 600,000 litres per day. We are very active in increasing the Ethanol programme. We are looking at grain and maize as a feedstock in the coming future to make this a multi feedstock facility. We are also looking at CBG in the future.

You are setting up a grain-based Ethanol project. What is the current status of the project and when are you planning to complete it?
We have already received necessary approval from the government. It will help us as a dual feedstock and lead to risk mitigation. As it is a short-term crop, in case there is a monsoon failure, it also gives us a twin feedstock to run our facilities, enhancing capacity utilization of the distillery. Grain-based plant is being planned for two lakh litres per day.

What are your plans for bio-based chemicals?
In addition to making our Ethanol facility, multiple feedstock facilities, we are also looking to add Specialty Chemicals to our portfolio. We believe that the use of bio-based biomass to make chemicals, and in particular Speciality Chemicals, is going to be also an area of future development.

There is a big thing of looking at biogenic carbon as a feedstock compared to fossil carbon. This is encouraged by either boardroom commitments, regulations or customer preferences. So, Godavari is continuing to work to make Specialty Chemicals that may find application in Pharma Intermediates, Agro Intermediates or in Coatings, Paints and a wide variety of chemical applications.

We are working with customers closely to see whether we make a drop-in product or it could be a green substitute with slightly better properties so that the substitution may create a better category of product. Traditionally, these things don't happen overnight. You are not substituting a fossil commodity with a green commodity and that would not work because it has a very different economic base. It takes time to work with customers. Godavari is definitely looking to work on bringing in new products in the next financial year.

How does biorefinery foster a culture of innovation and how will research and development play in its growth?
We look at research from four points of view. We look at research on the farm and agriculture site because ultimately biomass is grown on the farm. We have laboratories in Mumbai for lab work. We have pilot plants and research facilities with slightly larger lab facilities in the plants and Anally we have some pilot plants where we can do a semi-commercial business before we go to commercial. So, we have a comprehensive culture of innovation. We have many Scientists and Engineers working with us and we also collaborate with people outside.

What sort of approach to waste management and utilization of waste streams in the operations that you do?
I think the first idea is to think of waste as wealth and see how one can find use in all the waste streams that we have. Recycling brings value from it. Around 50-60 years ago, molasses itself was a waste stream and it became Ethanol. Bagasse was a waste stream and it became electricity. We have various streams today. Now, we are looking at finding ways to extract potash out of the ash of the incineration boilers in a distillery. We are making bricks from some of our other ash. We are also working very seriously on recycling streams.

How does Godavari ensure sustainable sourcing practices and support the local agriculture community?
We are now focusing on research for sustainable sourcing. We often see depletion of oil reserves, gas reserves, trees or coal but we don't observe the depletion of the soil carbon. Ultimately, it is the soil carbon that will convert to biomass, which we can either use for food or energy. The depletion of soil carbon depletes will reduce yields of these products. At the same time, if we can increase this soil carbon, we are going to improve the yields and sequester a lot of carbon in the atmosphere. We are executing a big project on this with Somaiya Vidyavihar University. Agriculture researchers are working on this with a lot of farmers and trying to see whether we can do this on a large scale.

How do you see Godavari Refineries integrating sustainable practices into its overall operations, including resource consumption and emission reduction?
Sustainability is part of our DNA. When we work with farmers to improve soil carbon, we also ask them if they can intercrop with nitrogen Axing kinds of crops such as soya to reduce the use of chemical fertilizers. We are working with them to use traditional agro-ecological practices. The success of this will automatically start sequestering more soil carbon and reduce Scope 3 emissions. Secondly, once CBG is in place, one can also work with tractor manufacturers to start using tractors on CBG. This is futuristic thinking but it is doable.
We are constantly thinking of how we work on energy efficiencies to further reduce Scope 2. We can produce more electricity from the same biomass. When we are continuously innovating to make products from biogenic carbon, we will continue to reduce Scope 3 as we supply.

For us, sustainability is not just environmental but also social, and we keep educating farmers about soil carbon. Hence, it is the wider definition of sustainability that we work on. When we are able to produce a product that may have a better profile for customers, you have actually achieved a complete win. We are also getting certifications from global bodies such as Bonsucro.

When are you planning to achieve net carbon zero?
We published our first sustainability report and we will articulate a strategy going forward. We want to build our strategy of converting biomass into biofuels, foods, sugar, electricity and more a whole range of new chemicals. This is not a 12 month exercise but a continuous exercise. We will continue to innovate and the effect will be seen in quarters and also in years.

Your thoughts on the future of the biofuel programme?
The Prime Minister at the 90th anniversary of the RBI mentioned about the Ethanol programme. He gave an interview in which he talked about the Ethanol Blending Programme and it finds mention in the BJP manifesto. I believe if India has to maintain its path to net zero and maintain its energy security in the light of current geopolitics, the Biofuel programme will grow.

Does the company plan to go for the IPO in this financial year?
We are certainly looking at Aling DRHP this year.

We are looking at grain and maize as a feedstock in the coming future to make this a multi feedstock facility.

Source: India Chemical News