- India allows sugar mills to use cane juice, syrup, and B-heavy molasses for ethanol production starting November 1.
- The government permits distilleries to buy up to 2.3 million metric tons of rice from FCI for ethanol production.
- These policy changes support India’s goal of blending 20% ethanol into gasoline by 2025-26.
India will allow sugar mills to use cane juice or syrup for ethanol production starting November 1, according to a government notification issued on Thursday, August 29. This policy change follows restrictions imposed in December 2023, when a poor monsoon season reduced cane crops and prompted the government to prioritise sugar output.
The new guidelines permit distilleries to use B-heavy molasses, a byproduct with higher sucrose content, for ethanol production. Previously, sugar mills held around 750,000 metric tons of B-heavy molasses unused due to the restrictions. “With the restrictions lifted, mills can now utilise these stocks,” said Prakash Naiknavare, Managing Director of the National Federation of Cooperative Sugar Factories Ltd.
India, the world’s second-largest sugar producer, has witnessed significant increases in ethanol production capacity across its sugar mills in recent years. Leading companies like E.I.D.-Parry, Balrampur Chini Mills, Shree Renuka, Bajaj Hindusthan, and Dwarikesh Sugar have invested heavily in expanding their facilities. The policy shift enables these mills to capitalise on their expanded capacities.
The government also announced that distilleries can purchase up to 2.3 million metric tons of rice from the state-run Food Corporation of India (FCI) for ethanol production. This move seeks to further boost ethanol output in the country. “The permission to use FCI rice will enhance ethanol production in dual-feed distilleries,” said Vijay Nirani, Managing Director of TruAlt Bioenergy Ltd.
Nirani emphasised that these changes support the government’s ethanol blending targets. India aims to blend 20% ethanol into gasoline by 2025-26, up from the current level of around 13%. Increased ethanol production will enable mills and distilleries to make timely payments to farmers for cane supplies.
The decision to ease restrictions on ethanol production aligns with India’s broader strategy to reduce its dependence on imported fuel and promote cleaner energy sources. The government has focused on ethanol blending as a key component of its energy policy, launching multiple initiatives to increase domestic production.
The policy changes provide much-needed financial relief to the sugar industry, which has faced pressure due to fluctuating sugar prices and unpredictable weather patterns. By offering more feedstock options for ethanol production, the government aims to stabilise the industry and ensure steady returns for sugar mills.
India’s sugar industry plays a crucial role in the rural economy, supporting millions of farmers. The latest government measures strengthen this sector by diversifying its revenue streams through ethanol production.
In summary, the government’s decision to lift restrictions on ethanol production from cane juice, syrup, and B-heavy molasses and approve the use of FCI rice marks a significant shift in policy. This move boosts ethanol output, supports the sugar industry, and helps India achieve its ambitious ethanol blending targets.