Bhubaneswar: Bharat Petroleum Corporation Limited (BPCL) and Odisha University of Agriculture and Technology (OUAT) joined hands on Sunday to develop, establish and promote rice straw based bio-fuel production in the state.

A memorandum of understanding (MoU) was signed to this effect between the two organisations.

The MoU was signed in presence of Union minister of petroleum and natural gas Dharmendra Pradhan.

The BPCL will provide financial support of Rs 5 crore to the OUAT for effective utilisation of paddy straw for biofuel production in a biochemical enzymatic process.

Of the total budget allocation, Rs 2 crore will be used as a corpus for the BPCL chair and Rs 3 crore as research contingency for development, establishment and popularisation of the biofuel production technology.

"This endeavour is in line with the policy decision for supplementation of 10 per cent straw based ethanol for increasing fuel efficiency and reducing the pressure on fossil fuel," officials said.

The large acreage and production of rice in the state has provided ample of opportunities to excel in promotion of rice straw based bio-fuel production, an official said.

Odisha is a major rice-producing state. Since it is a staple food, rice is grown in all the agro-climatic zones of the state. At present, the state has the annual rice production of 85 lakh tonnes with approximate production of 100 lakh tonnes of rice straw.

Except use as fodder and few domestic purposes, there is almost no economic utilisation of rice straw. Speaking on the occasion, Pradhan said: "The BPCL is planning to set up an industry at an investment of Rs 750 crore to produce straw-based ethanol. The chair at OUAT will provide the required support."