On Thursday, August 29, the Indian government allowed sugarcane juice and sugar syrup for ethanol production in the 2024-2025 ethanol supply year (ESY), reversing the ban imposed last year.

With effect from November 1, 2024, the cap on sugar diversion for ethanol production will be removed by the Union government. This will allow the utilisation of cane juice, syrup, and various types of molasses. 

In December 2023, the government prohibited the use of sugarcane juice or sugar syrup for ethanol production in the 2023-2024 ESY (December-November) to ensure enough sugar was available for domestic consumption and to control prices.

The government aims to achieve a 20% ethanol blending target by 2025-2026. India is the world’s second-largest sugar-producing country after Brazil.

According to the food ministry order, sugar mills and distilleries are permitted to produce ethanol from sugarcane juice/sugar syrup, B-heavy molasses, and C-heavy molasses for ESY 2024-2025 by the agreement/allocation with OMCs (oil marketing companies).

It also stated that the Food Ministry and Petroleum and Natural Gas Ministry would periodically assess the diversion of sugar for ethanol production compared to sugar production in the country to ensure a year-round supply of sugar for domestic consumption.

Official data indicates that ethanol blending in India had reached 13.3% by July, up from 12.6% during the 2022-2023 season. India’s total ethanol production capacity is currently 1,589 crore litres. OMCs purchased 505 crore litres of ethanol for blending purposes during the 2023-2024 season.

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