India to allow diversion of up to 1.7 million tonnes of sugar for ethanol production

Mumbai: In a latest development, the Indian government has granted sugar mills the green light to divert up to 1.7 million metric tonnes of sugar for ethanol production. This move aims to mitigate disruptions in its ambitious ethanol program while navigating concerns about falling sugar output.

As the world’s second-largest sugar producer, India had previously instructed sugar mills not to utilize sugarcane juice/sugar syrup for ethanol due to production concerns, especially in states like Maharashtra and Karnataka affected by drought.

However, the government has now chosen to allow the diversion of cane juice and B-heavy molasses for ethanol production, setting a cap of 1.7 million metric tonnes for the ESY 2023-24, officials reported on Friday.

A senior government official stated that a quota will soon be allocated for sugar mills and distilleries.

The official further assured that the available sugar supply would still be sufficient to meet local demand, even with the diversion of sucrose for ethanol production.

An order issued by the Department of Food and Public Distribution (DFPD) to sugar mills/distilleries on December 15 states that Oil Marketing Companies (OMCs) will issue a revised allocation of Sugarcane Juice (SCJ) and B Heavy Molasses (BHM) based ethanol for ESY 2023-24, to each distillery, and inform DFPD after placement of revised contracts.

“On receipt of such communication from OMCs for the revised quantity of SCJ & BHM based ethanol as mentioned in notification, all sugar mills and distilleries will supply ethanol strictly as per the revised quantity of SCJ & BHM ethanol,” the order further reads.

DFPD also said that no diversion of sugarcane juice and B Heavy molasses is allowed for production of Rectified Spirit (RS)/Extra Neutral Alcohol (ENA). Also all molasses based distilleries will endeavour to make ethanol from C Heavy

The government in a notification released on December 7, 2023, directed to all sugar mills and distilleries not to use Sugarcane Juice/Sugar Syrup for Ethanol in ESY 2023-24 with immediate effect. Supply of ethanol from existing offers received by OMCs from B-Heavy molasses will continue.


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