Central Idea

The Ministry of Consumer Affairs, Food and Public Distribution issued a directive to sugar mills and distilleries, not to use sugarcane juice or syrup for ethanol production in the ethanol year 2023-2024.

No Sugarcane Juice for Ethanol Production

Continuation of Existing Supplies: The directive allows the continued supply of ethanol from B-Heavy molasses based on existing offers received by Oil Marketing Companies (OMCs).
Regulatory Oversight: The Department of Food and Public Distribution, responsible for monitoring sugar production and availability, implements this directive under the Sugar (Control) Order.

Ensuring Sugar Availability: The government’s decision aims to ensure sufficient sugar availability in India, considering the lower sugar production in the country.
Food vs. Fuel Consideration: Businesses highlighted this move as a balance between food security and fuel production.
Impact on Ethanol Blending Targets: The directive is significant in the context of India’s goal of achieving 20% ethanol blending by the 2025-2026 ethanol year.

ISMA’s Response: The Indian Sugar Mills Association (ISMA) is assessing the implications of the order.
Effect on Domestic Sugar Supply: Industry sources indicate that this decision will ensure adequate sugar supply domestically, especially with reduced sugarcane production in states like Maharashtra and Karnataka.
Impact on Ethanol Blending Program: The restriction is likely to affect the ethanol blending program, which is a key component of India’s renewable energy strategy.
Consequences for Ethanol-Only Units: Facilities dedicated solely to ethanol production may face challenges due to this new policy.

The directive represents a strategic decision by the Indian government to prioritize domestic sugar availability over ethanol production from sugarcane.
Monitoring the impact of this directive on both the sugar industry and the ethanol blending program will be crucial in the coming years.