Starting November 1, 2024, the Union government will lift the cap on sugar diversion for ethanol production, allowing the use of cane juice, syrup, and various molasses types. Additionally, distilleries can now purchase up to 2.3 million metric tons of rice from the Food Corporation of India for ethanol. This policy aims to boost renewable energy while maintaining stable sugar availability. The Department of Food and Public Distribution and the Ministry of Petroleum and Natural Gas will oversee the impact on sugar supplies.
The Union government has made a notable policy shift, allowing sugar mills to use cane juice or syrup to produce ethanol for the upcoming Ethanol Supply Year (ESY) 2024-25, starting November 1, 2024.
This update, announced in a notification on August 29, 2024, removes the previous cap on sugar diversion for ethanol production . Expanded Production Capabilities In addition to cane juice and syrup, the new policy permits the use of B-Heavy molasses and C-Heavy molasses for ethanol production.
According to the Ministry of Consumer Affairs, Food and Public Distribution, "Sugar mills and distilleries are allowed to produce ethanol from sugarcane juice/sugar syrup, B-Heavy molasses as well as C-Heavy molasses during ESY 2024-25 as per the agreement with OMCs.
" This adjustment is intended to support the government’s goals of increasing renewable energy usage and reducing dependence on fossil fuels . Rice Purchase Allowance for Ethanol Production The government has also authorized distilleries to purchase up to 2.3 million metric tons of rice from the Food Corporation of India specifically for ethanol production.
This measure is aimed at boosting ethanol output and supporting the broader strategy of blending ethanol with fuels.
Review and Monitoring Process To ensure the policy does not disrupt domestic sugar availability , the Department of Food and Public Distribution (DFPD) and the Ministry of Petroleum and Natural Gas (MoPNG) will collaborate to monitor and review the diversion of sugar to ethanol production.
The Ministry of Consumer Affairs, Food and Public Distribution stated, "DFPD, in coordination with the MoPNG, shall periodically review the diversion of sugar to ethanol production vis-a-vis the production of sugar in the country, so that year-round sugar availability for domestic consumption is maintained.
" This policy change is part of the government's ongoing effort to increase ethanol production and promote sustainable energy practices.
By allowing a broader range of sugar derivatives for ethanol production, the government aims to enhance the efficiency and flexibility of the ethanol supply chain while safeguarding the stability of domestic sugar supplies.
Further details on how this policy shift will impact the sugar and ethanol markets are yet to be fully disclosed.
Industry stakeholders and market analysts will be closely monitoring the effects of these changes in the coming months.