Govt allows sugar mills and distilleries to produce ethanol from Sugarcane juice

The government has approved the allocation of 23 lakh tonnes of rice from the Food Corporation of India (FCI) stock for ethanol production.

The central government has allowed sugar mills and distilleries to produce ethanol from sugarcane juice, syrup, and B-heavy molasses for the ethanol supply year 2024-25. This decision reverses a previous ban imposed on December 15, 2023. The Director of Sugar in the Union Ministry of Consumer Affairs, Food, and Public Distribution issued the order lifting the restriction. This decision aligns with agreements between the Food Ministry, the Petroleum and Natural Gas Ministry, and oil marketing companies (OMCs). Both ministries will closely monitor the diversion of sugar for ethanol production to balance it with domestic sugar supply needs.

In addition to this, the government has approved the allocation of 23 lakh tonnes of rice from the Food Corporation of India (FCI) stock for ethanol production. Ethanol producers will be able to participate in FCI auctions to purchase this rice, which can be used as feedstock.

Last year, due to low sugar production estimates and rising prices of sugar, government banned the production of ethanol from sugarcane juice, syrup and B-heavy molasses production at sugar mills. Earlier FCI stopped selling rice for ethanol production due to rising prices. The government has set a target of 20 percent ethanol blending in petrol to 20 by 2025., which is at the level of 13 per cent as per the latest data.

To ensure sufficient domestic sugar supplies, the government has also maintained a ban on sugar exports, despite industry claims that there is adequate stock for export. The industry has called for the export ban to be lifted, citing expectations of better sugar production in the upcoming season.

 Government has also announced that he Food Ministry will continue to monitor sugar production in collaboration with the Petroleum Ministry to ensure a balanced approach to ethanol production and sugar supply.

Welcoming Decision

The sugar mills body, Indian Sugar and Bio-Energy Manufacturers Association (ISMA), has welcomed the decision made by the government. Deepak Ballani, Director General of ISMA, said, “We welcome the decision taken by the government to lift the restriction on ethanol production. On behalf of the industry, ISMA would like to thank the Government of India. Lifting the restriction and allowing unrestricted ethanol production from sugarcane juice, B-Heavy Molasses, and C-Heavy Molasses for ESY 2024-25 is a significant relief for the industry.”

The government has approved the allocation of