Central Idea
- The Ministry of Consumer Affairs, Food and Public Distribution issued a directive to sugar mills and distilleries, not to use sugarcane juice or syrup for ethanol production in the ethanol year 2023-2024.
No Sugarcane Juice for Ethanol Production
- Continuation of Existing Supplies: The directive allows the continued supply of ethanol from B-Heavy molasses based on existing offers received by Oil Marketing Companies (OMCs).
- Regulatory Oversight: The Department of Food and Public Distribution, responsible for monitoring sugar production and availability, implements this directive under the Sugar (Control) Order.
Rationale behind the Directive
- Ensuring Sugar Availability: The government’s decision aims to ensure sufficient sugar availability in India, considering the lower sugar production in the country.
- Food vs. Fuel Consideration: Businesses highlighted this move as a balance between food security and fuel production.
- Impact on Ethanol Blending Targets: The directive is significant in the context of India’s goal of achieving 20% ethanol blending by the 2025-2026 ethanol year.
Implications for Industry
- ISMA’s Response: The Indian Sugar Mills Association (ISMA) is assessing the implications of the order.
- Effect on Domestic Sugar Supply: Industry sources indicate that this decision will ensure adequate sugar supply domestically, especially with reduced sugarcane production in states like Maharashtra and Karnataka.
- Impact on Ethanol Blending Program: The restriction is likely to affect the ethanol blending program, which is a key component of India’s renewable energy strategy.
- Consequences for Ethanol-Only Units: Facilities dedicated solely to ethanol production may face challenges due to this new policy.
Conclusion
- The directive represents a strategic decision by the Indian government to prioritize domestic sugar availability over ethanol production from sugarcane.
- Monitoring the impact of this directive on both the sugar industry and the ethanol blending program will be crucial in the coming years.
