India has reversed its previous restrictions and is now permitting the production of ethanol from sugarcane juice, syrup, and molasses for the 2025-26 marketing year. The government's Department of Food and Public Distribution (DFPD) has communicated this decision to sugar mills and distilleries. This action aims to promote ethanol blending with fuel while maintaining sufficient sugar availability for domestic consumption.
The decision allows sugar mills and distilleries to produce ethanol from various sources, including sugarcane juice, sugar syrup, B-heavy molasses (BHM), and C-heavy molasses (CHM) without limitations. This comprehensive approach provides flexibility to the industry and ensures a stable supply of ethanol for blending purposes. The DFPD, in collaboration with the Ministry of Petroleum and Natural Gas (MoPNG), will monitor the diversion of sugar for ethanol production against the country's overall sugar output. This periodic review aims to guarantee an adequate supply of sugar for domestic consumption throughout the year.
The previous restrictions, imposed in December 2023, aimed to secure enough sugar for domestic needs and stabilize prices. However, the government has now determined that easing these restrictions is feasible. This reversal has been welcomed by the Indian Sugar and Bio-Energy Manufacturers Association (ISMA). ISMA views this policy shift as a significant relief for the industry, allowing unrestricted ethanol production from various sugarcane sources for the ethanol year 2024-25.
India has been actively pursuing ethanol blending to reduce its reliance on fossil fuels and promote a greener economy. Official data indicates that ethanol blending in India reached 13.3% by July of the current season, a rise from 12.6% in the 2022-23 season. The country's total ethanol production capacity is currently at 1,589 crore liters. During the 2023-24 season, Oil Marketing Companies (OMCs) purchased 505 crore liters of ethanol for blending. The government aims to achieve a 20% ethanol blending target by 2025-26. India is the world's second-largest sugar producer, after Brazil.
