Business Line | Oil Minister asks sugar industry to explore other sources for ethanol production

Oct 20,2022

Oil Minister Hardeep Singh Puri on Wednesday advised the sugar industry to diversify sources for producing ethanol, as sugarcane — currently the main source for making ethanol in India — is a water intensive crop. Puri’s statement was at variance with his Cabinet colleague Nitin Gadkari who had earlier suggested focusing on reduction of sugar and boosting ethanol production from sugarcane.

At present, India total ethanol production capacity is 923 crore litre, of which 605 crore litre is sugar-based and 318 crore litre is grain-based. India is the world’s largest producer and second largest exporter of sugar.

Speaking at an event organised by the SIAM’s International Conference on Biofuel, Puri said: “I always worry when people ask, as your president (Aditya Jhunjhunwala) did, about sugar. Sugar is very water intensive... So in many ways, if you look at how much ethanol you can produce from sugar, you are actually exporting water... I don’t think that’s effective.”

He further said, “I know there are local considerations, but we should be very careful and we also want to avoid the global debate which came on food security. You will find that the diversification we have for producing the required quantity for ethanol production to get to 20 per cent, we are diversifying to agricultural waste to rice straw, etc, and I think that constitutes the future.”

Opposite view
Speaking at an ISMA conference on September 21, Gadkari had said: “My request is to reduce production of sugar, otherwise the future is very bad. I know there are constraints. But the alternative is that now in place of sugar, we need to make more ethanol. Technology is developed. Now bio-sugar syrup is available, which you can make and maintain for a year... Divert sugar to ethanol, I request you.”

Interest subvention
Earlier this month, businessline had reported the Centre’s move to extend the timeline for disbursement of loans up to March 31, under the ethanol blending programme interest subsidy scheme.

Currently, interest subvention at 6 per cent per annum or 50 per cent of the rate of interest charged by banks, whichever is lower, is available to sugar mills for five years, including a one-year moratorium under the scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity.

The Food Ministry had said ethanol production capacities are required to be enhanced to about 1,016 crore litre per annum to achieve a 20 per cent blending target by 2025. The decision to extend the timeline on ethanol projects would help in enhancing production capacities.

In 2021-22 sugar season (October-September), India produced a record over 4,318 lakh tonnes (lt) of sugarcane, out of which about 3,574 lt was crushed by mills to produce about 394 lt of sugar (sucrose). Out of this, 35 lt sugar was diverted to ethanol production and 359 lt sugar was produced by mills.