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HomePosts Tagged "sugar industry in India"
Agribusiness, Biofuel industry, India, Sugar industry

ISMA proposes a roadmap to a 55 per cent or even 60 per cent ethanol supply contribution, contingent on policy interventions and farmer support.

 The drop in Indian cane production due to the global climate phenomenon, EL-Nino, had led to a sudden stoppage of ethanol production from syrup and BHM from mid-December 2023. This meant that only 20 Lac tons of sugar was diverted towards the production of around 200 Cr litres of ethanol.

However, based on the sugar production figures, India could have afforded to produce around 250 Crore litres of ethanol more by diverting a further quantity of around 25 Lac tons sugar even after meeting full requirements of 285 Lac tons of sugar for domestic demand after leaving more than adequate 66 Lac tons of closing stock at the end of the season. Subsequently, the sugar industry could have supplied 450 Crore litres of ethanol which could have been almost adequate for the current ethanol year requirement from the sugar industry.

Looking at the statistical figures above, we delve into the challenges faced by the sugar sector in meeting the 20 per cent ethanol blending target in future and explore the policy interventions necessary to facilitate compliance. By examining the economic and environmental benefits of ethanol blending, the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) aims to provide a comprehensive overview of the road ahead in achieving this critical milestone for the Nation.

India’s 20 per cent Ethanol Blending requirement

India started blending ethanol in petrol on a pilot basis in 2001 before launching the dedicated Ethanol Blended Petrol (EBP) programme in 2003. Since then, India has come a long way to set a 20 per cent ethanol blending target till 2030. This measure is designed to lower carbon emissions, enhance air quality, and promote the use of biofuels derived from renewable sources such as sugarcane, corn, or other biomass. It also aims to create a more sustainable energy mix and reduce the reliance on fossil fuels.

 Prabhakar Rao, President of the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), said, “The Indian sugar industry is well-positioned to meet the government’s ambitious 20 per cent ethanol blending target by 2030. Our industry can contribute a significant 55 per cent of the ethanol requirement, and even increase that to up to 60 per cent if we can get stable policy support and investment on sugarcane production stabilisation.”

Striving to achieve the same, ISMA is confident that the sugar industry is capable of meeting the 55 per cent ethanol supply to meet the 20 per cent EBP target by 2030. In addition, the industrial landscape holds the ability to stabilise the policies and investment in sugar production.

Implications for the Sugar Industry

For the Indian sugar industry, the Ethanol Blending Requirement presents both challenges and opportunities. On one hand, it offers a new market for ethanol production, creating a potential revenue stream. On the other hand, meeting the demand for ethanol production necessitates significant investments in infrastructure and technology, posing challenges for sugar producers.

Current Challenges

Availability of Raw Materials – One of the primary challenges is ensuring an adequate and affordable supply of raw materials for ethanol production. The sugarcane area needs to be expanded only marginally by about 7-8 per cent. And, the yield is required to be stabilised at about 81-82 tons per ha. The country achieved the highest sugarcane production of 4616 Lac tons in the year 2021-22 with a productivity of 82.7 tons per ha. We need to increase to 5100 Lac tons and stabilize the production to meet the country’s sugar and ethanol demand.

Additionally, the experts believe that if the cane production stabilisation measures are undertaken in collaboration with cane farmers by extending various schemes of the Govt. of India, the sugar industry can increase its contribution to even up to 60 per cent of ethanol supplies after fully meeting the sugar demand of the country.

ISMA proposes a roadmap to a 55

AgroPolicy, India, Sugar industry

India achieves 12% ethanol blending with petrol in ESY 2022-23 while the ethanol production has increased from 173 crore litres to more than 500 crore litres during the same period.

In its 63rd council meeting, International Sugar Organisation (ISO), headquartered in London, has announced India to be the Chair of the organisation for 2024. This is a huge achievement for the country to lead the global sugar sector and reflection of growing stature of the country in this domain. While attending the ISO Council Meeting, Sanjeev Chopra, Secretary (Food), Government of India remarked that during its period of chairmanship of ISO in 2024, India seeks support and cooperation from all member countries and would like to focus on bringing together all member countries to adopt more sustainable practices in sugarcane cultivation, sugar and ethanol production and better utilisation of by-products.

India has been the largest consumer and second largest producer of sugar in the world. With about 15 per cent share in global sugar consumption and about 20 per cent production of sugar, Indian sugar trends affects the global markets profusely. This leading position makes India as the most suitable nation to lead International Sugar Organisation (ISO) which is the apex international body on sugar and relating products having about 90 countries as members.

With Brazil in the Western Hemisphere, India is the market leader in Eastern Hemisphere for sugar market. Now, being the 3rd largest country in the world in ethanol production after USA and Brazil, India has shown commitment towards green energy and its capability to twist the challenges of surplus sugar in domestic market to solution of fossil fuels imports and a tool to meet COP 26 targets for India. It is remarkable that ethanol blending percentage in India has increased from 5 per cent in 2019-20 to 12 per cent in 2022-23 while the production has increased from 173 crore litres to more than 500 crore litres during the same period.

Indian sugar industry has come a long way in modernisation and expansion as well as in diversification to exploitation of potential of its by-products to generate additional revenue streams to make the whole business model both sustainable and profitable. It has proven its robustness during Covid pandemic by operating its mills while the country was facing lockdown and rising to the occasion by producing hand sanitisers sufficient to meet the demand in the country.

India has a unique distinction of being the Payer of the Highest Cane Price to its farmers and still efficient enough to make profits and operating in self-sufficient manner without any Government financial assistance. Synergy between Government and sugar industry has made it possible to rejuvenate Indian sugar industry and to transform into a major player in green energy in the country. The era of pending cane dues of farmers has become a thing of past. More than 98 per cent cane dues of last season 2022-23 have already been paid and more than 99.9 per cent cane dues of previous seasons are clear. Thus, cane dues pendency is at all time low in India.

India has set the example by not only taking care of farmers and industry but also by putting consumers first. Domestic sugar retail prices are consistent and stable. While the global prices are hiked by about 40 per cent in one year, India has been able to contain sugar prices within 5% increase from last year without putting additional burden on the industry.

On technical side also, National Sugar Institute, Kanpur has spread its wings and is collaborating with many countries including Indonesia, Nigeria, Egypt, Fiji etc. for sharing the latest technologies in the sector and best practices.

India achieves 12% ethanol blending with petrol