Govt lifts curbs, allows using 4MT sugar for ethanol output in FY26

NEW DELHI: Govt has allowed production of ethanol from sugarcane juice, syrup and all types of molasses "without any restrictions" during the ethanol supply year (ESY) 2025-26 starting Nov.

This has been notified now considering that oil marketing companies (OMCs) are likely to float the tender for supply of ethanol from different feedstocks. Sugar stocks surged up to 20% Tuesday after the govt announcement.A notification issued by the food and public distribution dept Monday said that the dept in consultation with petroleum ministry would periodically review the diversion of sugar to ethanol production in order to ensure a smooth supply of sweetener in the domestic market.During the current ESY 2024-25, govt has permitted diversion of 4 million tonne of sugar for ethanol production.Meanwhile, food ministry officials said that there was no restriction on ethanol production from sugar cane juice, B-heavy and C-heavy molasses. But earlier due to drop in the sugar production, govt on Dec 15, 2023 had restricted the diversion of sugar to ethanol produced from sugarcane juice and B-Heavy molasses during ESY 2023-24 in order to ensure the sufficient availability of sugar for domestic consumption.

"Now, OMCs are likely to float the tender for supply of ethanol. Therefore, keeping in view production estimates in the ensuing sugar season, govt has allowed the production of ethanol from sugarcane juice, syrup and both B- and C-Heavy molasses for the ESY 2025-26 without any restriction," said an official.There are approximately 263 molasses-based distilleries with a combined ethanol production capacity of 620 crore litres. Maharashtra leads with 116 distilleries and an ethanol capacity of 225 crore litres. Additionally, ethanol is produced from grain, totalling around 328 crore litres, primarily using maize in grain-based distilleries.