In a long-awaited and strategically crucial move, the Government of Maharashtra has announced a landmark policy decision on 23rd July 2025, permitting the establishment and operation of multi-feed distilleries across the state. This progressive step is in consonance with the National Bioenergy Policy and Ethanol Blending Program (EBP) laid down by the Government of India, which aims to achieve 30% ethanol blending with petrol by 2030, an increase from the current 18%-19% levels.
What is a Multi-Feed Distillery?
A multi-feed distillery is designed to produce ethanol and other alcohol products using multiple raw materials such as:
~Sugarcane juice/syrup
~B-heavy molasses
~C-heavy molasses
~Grain (maize, rice, broken rice, etc.)
~Damaged food grains (DFG)
Such flexibility ensures year-round operation, as it is not dependent on a single seasonal feedstock. This is a major shift from traditional molasses-based distilleries which operate only for 6 to 8 months a year.
Highlights of the New Maharashtra Policy :
Unified Licensing for Multi-Feed Distilleries: The new policy simplifies the licensing framework, allowing distilleries to switch between different feedstock’s without seeking multiple approvals each time.
Alignment with Central Policy: It brings Maharashtra in sync with the Centre’s Biofuel Policy (2018) and the more recent updates under the National Ethanol Mission, enabling access to soft loans and central incentives.
Operational Year – Round: With flexibility in raw material sourcing, distilleries can function for 330+ days a year instead of being limited to the crushing season.
Single Window Clearance System: The government promises faster clearances through a dedicated portal, especially for environment, excise, and feedstock approvals.
Emphasis on Sustainable Feedstock’s: The policy encourages the use of surplus food grains and DFGs, reducing the over-dependence on sugarcane-based inputs.
Expected Benefits of the Policy:
For the Sugar Industry –
Sustainability: Enables the sugar industry to diversify into ethanol production profitably, thereby balancing the sugar surplus and reducing unsold stock.
Revenue Stability: Additional revenue streams reduce reliance on sugar prices and exports.
Reduced Working Capital Pressure: With assured ethanol offtake by OMCs (Oil Marketing Companies), sugar mills improve cash flow and timely FRP payments to farmers.
For Farmers –
Assured Market for Cane: More cane crushed and juice diverted for ethanol means lesser chances of arrears.
Price Realization: B-heavy and syrup diversion fetch higher realization for the industry, indirectly benefiting the farmer.
For the State and Nation –
Reduced Import Bill: Substituting ethanol for petrol saves precious foreign exchange.
Environmental Gains: Ethanol-blended petrol emits lower carbon and particulate matter.
Employment Generation: Continuous operation boosts rural employment, especially in skilled technical manpower.
CHALLENGES & CONCERNS (Cons) –
Feedstock Allocation and Control – Balancing between food security and fuel is a sensitive issue. Large-scale diversion of grains or juice for ethanol could raise concerns from the food security angle.
Regulatory Hurdles – Although a single-window system is proposed, actual implementation often gets bogged down in environmental clearances, water usage permissions, and local objections.
Infrastructure and Capex – Multi-feed distilleries require higher capital investment, especially in grain processing (dryer, milling, CO2 recovery units).
Retrofitting older units into multi-feed plants can be technically complex and expensive.
Pricing Mechanism Uncertainty –
While the Centre notifies ethanol prices for various feedstocks, uncertainties about future price changes, input cost volatility, and procurement timelines by OMCs may affect project viability.
Policy Implications and the Road Ahead
This long-pending decision marks a turning point for Maharashtra’s sugar and ethanol sector. With nearly 200 distilleries in the state and more than 20 proposals already awaiting approval, this policy unlocks immense potential.
The industry now needs to respond with strategic investment, skilled manpower training, and technology adoption, including automation, AI integration, and wastewater management systems.
It also opens doors for advanced biofuel projects, such as…
-Compressed Biogas (CBG)
-Alcohol-to-Jet Fuel (AtJ)
-Green Hydrogen from ethanol
The central and state governments must work together to ensure:
~Long-term procurement assurance from OMCs
~Financial support (soft loans, interest subvention, viability gap funding)
~Infrastructure development (ethanol pipelines, blending depots, grain storage)
The Government of Maharashtra’s decision to permit multi-feed distilleries is a progressive, timely, and strategic step toward achieving energy security, agricultural stability, and rural economic development. With the ethanol economy estimated to grow from ₹20,000 crore to ₹1 lakh crore by 2030, Maharashtra is well-poised to lead this green industrial revolution. This move not only aligns with national priorities but also empowers the cooperative sugar sector to become future-ready, green, and globally competitive.
Special Words: This article is dedicated to the efforts of all those policy makers, cooperative leaders, private sugar industrialists, technocrats, and farmers who tirelessly advocated for this reform in the interest of Maharashtra’s sugar economy and the nation’s green future.
P.G. Medhe is the former Managing Director of Shri Chhatrapati Rajaram Sahakari Sakhar Karkhana Ltd and sugar industry analyst. He can be contacted at +91 9822329898.
