The move will encourage sugar mills to divert excess sugar cane/sugar to ethanol and to achieve targets of blending ethanol with petrol
Incentive on sugar sacrificed for producing ethanol from B-heavy molasses/sugarcane juice/sugar syrup/sugar has been doubled from October 2021, onwards in their monthly release quota. This initiative was taken in view to encourage sugar mills to divert excess sugar cane/sugar to ethanol and to achieve targets of blending ethanol with petrol in line with Ethanol Blended with Petrol programme.
Due to excess availability of sugar in the country, the ex-mill prices of sugar remain subdued resulting in cash loss to sugar mills. This excess stock of 60 LMT also leads to blockage of funds and affects the liquidity of sugar mills resulting in accumulation of cane price arrears. To liquidate excess stocks, the Centre has also been extending assistance to sugar mills to facilitate export of sugar.
The Centre is taking several steps for diversion of sugar to ethanol. Government is encouraging sugar mills to divert excess sugarcane to ethanol to find a permanent solution to address the problem of excess sugar.
The government is encouraging sugar mills and distilleries to enhance their distillation capacities for which the government is facilitating them to avail loans from banks for which interest subvention @ 6 per cent or 50 per cent of the interest charged by the banks whichever is lower is being borne by the government.
As a result of these measures, ethanol distillation capacities in the country would likely be more than doubled by 2025, which would ensure achievement of 20 per cent blending target.
