The move is likely to help in reducing pending arrears of cane farmers

The Cabinet Committee on Economic Affairs chaired by Prime Minister, Narendra Modi, has given its approval for fixing higher ethanol prices derived from different sugarcane-based raw materials under the EBP Programme for the forthcoming sugar season 2021-22 during ESY 2021-22 from December 1, 2021, to November 30, 2022.

The approval has been given for the following:

(i) The price of ethanol from C heavy molasses route be increased from Rs 45.69 per litre to Rs 46.66 per litre,

(ii) The price of ethanol from B heavy molasses route be increased from Rs 57.61 per litre to Rs 59.08 per litre,

(iii) The price of ethanol from sugarcane juice, sugar/sugar syrup route be increased from Rs 62.65 per litre to Rs 63.45 per litre,

(iv) Additionally, GST and transportation charges will also be payable.

(v) Government has decided that Oil PSEs should be given the freedom to decide the pricing for 2G ethanol as this would help in setting up advanced biofuel refineries in the country. It is important to note that grain-based ethanol prices are currently being decided by Oil Marketing Companies (OMCs) only.

The approval will not only facilitate the continued policy of the government in providing price stability and remunerative prices for ethanol suppliers but will also help in reducing the pending arrears of cane farmers, dependency on crude oil imports and will also help in savings in foreign exchange and bring benefits to the environment.

The decision to allow Oil PSEs to decide the price of 2G ethanol would facilitate setting up advanced biofuel refineries in the country.

All distilleries will be able to take benefit from the scheme and a large number of them are expected to supply ethanol for the EBP Programme.

The government has been implementing Ethanol Blended Petrol (EBP) Programme wherein Oil Marketing Companies (OMCs) sell petrol blended with ethanol up to 10 per cent. 

Further, to kick-start the Second Generation (2G) ethanol programme (which can be produced from agricultural and forestry residues, e.g. rice and wheat straw/corn cobs and Stover/bagasse, woody biomass), a few projects are being set up by Oil PSEs taking financial assistance from the Government’s ’Pradhan Mantri JI-VAN Yojana’ approved by the CCEA in the past. These projects are likely to start commissioning from the ensuing ESY 2021-22.