The Indian sugar and bio-energy sector is seeking greater policy certainty on ethanol blending levels beyond the current 20%, showing concern that the absence of a long-term plan is leaving large investments underused. Speaking to The Hindu, Deepak Ballani, Director-General of the Indian Sugar & Bio-energy Manufacturers Association (ISMA), said that clarity on future blending targets is important to ensure the viability of infrastructure already built.
According to Mr. Ballani, the sugar industry has poured over Rs. 40,000 crore into ethanol manufacturing facilities, creating an annual production capacity of about 900 crore litres. However, he noted that a significant portion of this capacity remains idle. He highlighted a sharp shift in feedstock usage, pointing out that sugar-based raw materials, which once accounted for nearly 90% of ethanol production, now contribute just 28%, reported The Hindu.
“While we technically have the ability to supply ethanol beyond the 20% blending level, the lack of demand means our plants are running below capacity,” he said. This underutilisation, he added, not only impacts returns on investment but also affects mills’ ability to make timely payments to farmers.
To address this, ISMA has proposed that the government gradually raise blending targets, first to 22% and eventually to 25%. Ballani also called for a parallel policy push encouraging automobile manufacturers to produce flex-fuel vehicles and strong hybrid models capable of operating on 100% ethanol. Emphasising the need for multiple decarbonisation strategies, he remarked that electric vehicles alone cannot be the sole solution and that India must remain open to diverse technological pathways.
On the prospects of sustainable aviation fuel (SAF), Ballani said the industry has adequate feedstock to support higher blending mandates and even exports. However, he stressed that policy certainty remains a key missing element. Specifically, he called for assurances on guaranteed procurement volumes, timelines, and pricing mechanisms under an administered framework.
Ballani noted that SAF obligations are global in nature rather than country-specific, giving India a competitive advantage. He pointed to the nation’s surplus sugar availability and the comparatively low carbon footprint of Indian sugarcane cultivation, which makes domestically produced SAF well-suited for international markets.
He further added that even after meeting ethanol blending requirements, the country still has enough surplus to support SAF production. “At this stage, availability is not a constraint,” he said, reiterating that the main challenge lies in establishing a clear and predictable policy environment.
According to the news report by The Hindustan Times, India is likely to shift to ethanol-blended aviation fuel by mid-2027, gradually ramping it up in phases, with the addition of more than two dozen distilleries supported by federal biofuel incentives.
International Civil Aviation Organization (ICAO) has adopted Carbon Offsetting & Reduction Scheme for International Aviation (CORSIA) as a global market-based measure to reduce emissions from international aviation which require offsetting of emissions above a baseline value. Airlines can either use SAF or offset their emissions by purchasing carbon credits from ICAO approved Emissions Unit Programmes. SAF offers a direct pathway to emission reduction by lowering the lifecycle carbon footprint of aviation fuel. When airlines adopt CORSIA Eligible SAF (CORSIA Eligible Fuel) certified against ICAO’s sustainability standards and verified through Monitoring, Reporting, and Verification (MRV), they can claim these reductions as substitutes for carbon credits, thereby decreasing their offsetting obligations under the scheme.
