Ethanol push turns sweet for sugar mills

New Delhi : The Indian sugar industry is gearing up to enter a new chapter for mass production, as the sector welcomes the latest announcement by central government on the modified scheme for extending interest subvention for those setting up grain-based along with molasses-based ethanol distilleries.

Abinash Verma, Director-General, Indian Sugar Mills Association (ISMA), told Bizz Buzz that the sugar industry is preparing to make a significant reduction on its sugar surplus.

"The central government incentivised 6 million tonnes (or 60 lakh tonnes) of exports in both 2020 and in 2021. That is one strategy on surplus sugar. The second strategy is to divert the surplus sugarcane itself towards production of ethanol and reduce the sugar production.

The last season the quantum of molasses and (sugarcane) juice that we diverted to ethanol, allowed us to reduce our sugar production by 8 lakh tonnes. This year (2021), the offer that we have given to the oil marketing companies (OMCs) and the contract that we have signed, we are expecting that we will reduce sugar production to about 20 lakh tonnes by diverting the surplus into ethanol production," Verma said.

"As we move forward into the next year, and the year thereafter, we will be looking at increasing the number from 20 lakh tonnes to up to 30 to 40 lakh steadily, and for this we are trying to develop required capacities. We are short of capacity. This programme was started in 2009, and in 2015 it was further pushed by the Prime Minister by incentivising ethanol pricing and production," he added.

On Monday, ISMA had announced that the country's sugar output rose by 31 per cent to 142.70 lakh tonnes in the first three-and-a-half months of the 2020-21 marketing year that started in October 2020.

Speaking on the notification on modified scheme to enhance ethanol distillation capacity in the country, released by the Department of Food and Public Distribution, dated January 14, 2021, Verma said that the sugar industry will be able to produce significant amount of ethanol as against the target of 1,100 crore litres set by the government.

"We are regularly in touch, and in consultation, with the government. The government is looking at targeting 20 per cent blending (ethanol in petrol), for which they have estimated that OMCs would require about 1,100 crore litres (ethanol) in the next 7-8 years.

So, if there is a requirement of 1,100 crore litres, and from the back calculations we looked at, there would be enough ethanol produced by the sugar sector, from sugarcane juice or molasses (by product of sugarcane)," the ISMA Director General said.