Ethanol Restricrion Hurting Sugar Factories, NCP Chief Sharad Pawar Slams Govt Policy

Pune: India's sugar industry, which enjoyed a surge in ethanol production over the past decade, is facing financial distress due to recent government restrictions on the fuel. Despite record production of 502 crore liters of ethanol nationwide last year, with Maharashtra contributing 104 crore liters, factories are grappling with economic hardship. The culprit, according to Nationalist Congress Party leader and Vasantdada Sugar Institute President Sharad Pawar, is a December 2023 ordinance from the central government imposing curbs on ethanol production.

Addressing the 47th annual general meeting of the Vasantdada Sugar Institute (VSI), Pawar criticized the policy shift. He highlighted the government's ambitious target of 20% ethanol blend in petroleum products by 2025, a significant jump from the 1.5% in 2013-14 and the 12% achieved in 2022-23. However, the December ordinance placed a blanket ban on ethanol production from sugarcane juice, a move later amended to allow limited use for "B-heavy molasses." Even with this amendment, a cap of 17 lakh tonnes of sugar for ethanol production from juice and B-heavy molasses remains in place.

"Many factories are left with large stockpiles of B-heavy molasses from before December 15th," Pawar pointed out. "They are now struggling to utilize and sell this excess stock, pushing them into financial trouble."

Compressing New Opportunities

Looking beyond the current woes, Pawar urged the industry to explore the emerging opportunity of compressed biogas (CBG). The November 2023 government mandate requiring mandatory blending of CBG in CNG and PNG presents a potential silver lining. With a target of 5% CBG blend by 2028-29 and the estimated potential to produce 20 lakh tonnes of CBG from the sugar industry, generating annual revenue of Rs. 12,000 crore, embracing CBG could be a game-changer for these struggling factories.

The VSI meeting also saw the distribution of awards to outstanding sugar factories, farmers, and employees.