Latest news with #EthanolBlendingProgramme
Indian Express
5 days ago
- Business
- Indian Express
Sugar industry at crossroad as grain-based ethanol supply looks to take off
Ethanol, once touted to be the saviour of the sugar industry in times of excess production, is fast losing its sheen as grain-based ethanol production threatens to over turn the apple cart. Lower than expected returns, have seen many sugar millers — who had invested heavily in infrastructure for production of ethanol — wean away from producing the fuel additive and instead produce sugar. A press statement issued by Harshwardhan Patil, the president of the National Cooperative Sugar Factories Association, stated that the present price at which oil marketing companies procure ethanol from the sugar mills is not economical. 'Although there is potential to divert up to 40 lakh metric tonnes (LMT) of sugar into ethanol this year, only 32 LMTs are expected to be diverted. This shortfall is due to the gap between ethanol prices and the better returns from selling sugar directly in the domestic market. As a result, India's ethanol production capacity of 952 crore litres per year—including 130 crore litres from multi-feed distilleries—is being underused,' he said. In order to help sugar mills avoid overproduction of sugar, the central government had unveiled the Ethanol Blending Programme (EBP) in 2017-18. Under the programme, the sugar mills were encouraged to produce ethanol instead of just producing sugar. Marketing companies were to buy ethanol with highest price being paid for ethanol that is produced from sugarcane juice or sugar syrup. The idea behind the programme was to allow mills another source of income and avoid glutting in the sugar market. Along with sugar mills, ethanol was also being produced from food grains as well as maize. Patil in his report stated that the latter has been increasing with sugar mills falling behind. Thus for the ethanol supply year (December to November) 2024-25 sugar based feed stock produced 250 crore litres of ethanol while grain based feed stock produced 650 crore liters of the fuel additive. Infact, the contribution of grain based feed stock has been rising from 0 in 2017-18 to the present figures. 'In the Sugar Year (SY) 2022–23, the sugar industry reached a significant milestone by diverting 43 lakh tonnes of sugar towards ethanol production. This enabled the supply of 369 crore litres of ethanol, which accounted for an impressive 73% of the total ethanol blended with fuel across the country. However, in SY 2023–24, ethanol supply from sugar-based feedstocks declined to 270 crore litres, contributing only 38% to the national blending programme. This downward trend is projected to continue in SY 2024–25, with supply expected to fall further to 250 crore litres, making up just 28% of the total blending target of 900 crore litres,' he said. In view of the problems being faced by the industry, Patil has urged the government to increase the procurement cost of ethanol to reflect the rising cost of sugarcane, maize etc, as well allow for more than 20 per cent blending in petrol.
Mint
5 days ago
- Business
- Mint
Sugar industry seeks ethanol price revision as blending share drops to 28 pc
New Delhi, The sugar industry has demanded a revision of ethanol procurement prices and extension of blending targets beyond 20 per cent, as the sector's contribution to the national ethanol programme has declined sharply from 73 per cent to just 28 per cent. The industry has also demanded accelerated promotion and manufacturing of Flex-Fuel Vehicles to boost ethanol demand and ensure market preparedness for higher blending, National Federation of Cooperative Sugar Factories said in a statement. The demand was made by the industry delegation, led by Ravi Gupta, Chairman of IFGE's Sugar Bioenergy Group, and expert Member on the Board of NFCSF, in a meeting held at the PMO recently, it said. In 2022-23 season , NFCSF said the sugar industry reached a significant milestone by diverting 43 lakh tonnes of sugar towards ethanol production, enabling the supply of 369 crore litres of ethanol, which accounted for 73 per cent of total ethanol blended with fuel across the country. However, in 2023-24, ethanol supply from sugar-based feedstocks declined to 270 crore litres, contributing only 38 per cent to the national blending programme. "This is projected to fall further to 250 crore litres in 2024-25, making up just 28 per cent of the total blending target of 900 crore litres," it said in a statement. The main reason for this drop is that ethanol procurement prices have not been increased in line with the rise in the Fair and Remunerative Price of sugarcane, making ethanol production less profitable for sugar mills. Although there is potential to divert up to 40 lakh tonnes of sugar into ethanol this year, only 32 lakh tonnes are expected to be diverted. "This shortfall is due to the gap between ethanol prices and better returns from selling sugar directly in the domestic market," NFCSF said. As a result, India's ethanol production capacity of 952 crore litres per year including 130 crore litres from multi-feed distilleries is being under-utilised. The Ethanol Blending Programme has emerged as a vital solution to the longstanding issue of surplus sugar stocks under the National Policy on Biofuels – 2018, which set an ambitious target to divert 60 to 70 lakh tonnes of excess sugar annually towards ethanol production. Since the policy's inception, India's ethanol production capacity has expanded significantly from 518 crore litres in 2018 to 1,800 crore litres in 2025. Correspondingly, the ethanol blending rate with petrol has risen sharply from 4.22 per cent to 18.61 per cent as of April 30, 2025. Sugar production has reached 286.9 lakh tonnes as on April 30 of the ongoing 2024-25 season, out of which 30 lakh tonnes have been diverted for ethanol. The industry has additionally suggested evaluating the possibility of blending ethanol in diesel as a future strategy to expand ethanol use across fuel types. NFCSF noted that diverting sugar to ethanol does not reduce the actual production of sugar but helps to manage surplus sugar stocks, stabilise market prices, improve the financial health of sugar mills, and ensure timely payments to farmers. This article was generated from an automated news agency feed without modifications to text.
Time of India
5 days ago
- Business
- Time of India
Sugar industry seeks ethanol price revision as blending share drops to 28% from 73%
The sugar industry has demanded a revision of ethanol procurement prices and extension of blending targets beyond 20%, as the sector's contribution to the national ethanol programme has declined sharply from 73% to just 28%. The industry has also demanded accelerated promotion and manufacturing of Flex-Fuel Vehicles (FFVs) to boost ethanol demand and ensure market preparedness for higher blending, National Federation of Cooperative Sugar Factories (NFCSF) said in a statement. The demand was made by the industry delegation, led by Ravi Gupta, Chairman of IFGE's Sugar Bioenergy Group, and expert Member on the Board of NFCSF, in a meeting held at the PMO (Prime Minister's Office) recently, it said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Sasha Meneghel já está irreconhecível após sua recente transformação. 33 Bridges Undo In 2022-23 season (October-September), NFCSF said the sugar industry reached a significant milestone by diverting 43 lakh tonnes of sugar towards ethanol production , enabling the supply of 369 crore litres of ethanol, which accounted for 73 per cent of total ethanol blended with fuel across the country. However, in 2023-24, ethanol supply from sugar-based feedstocks declined to 270 crore litres, contributing only 38 per cent to the national blending programme. Live Events "This is projected to fall further to 250 crore litres in 2024-25, making up just 28 per cent of the total blending target of 900 crore litres," it said in a statement. The main reason for this drop is that ethanol procurement prices have not been increased in line with the rise in the Fair and Remunerative Price (FRP) of sugarcane , making ethanol production less profitable for sugar mills . Although there is potential to divert up to 40 lakh tonnes of sugar into ethanol this year, only 32 lakh tonnes are expected to be diverted. "This shortfall is due to the gap between ethanol prices and better returns from selling sugar directly in the domestic market," NFCSF said. As a result, India's ethanol production capacity of 952 crore litres per year -- including 130 crore litres from multi-feed distilleries -- is being under-utilised. The Ethanol Blending Programme (EBP) has emerged as a vital solution to the longstanding issue of surplus sugar stocks under the National Policy on Biofuels - 2018, which set an ambitious target to divert 60 to 70 lakh tonnes (LMT) of excess sugar annually towards ethanol production. Since the policy's inception, India's ethanol production capacity has expanded significantly from 518 crore litres in 2018 to 1,800 crore litres in 2025. Correspondingly, the ethanol blending rate with petrol has risen sharply from 4.22 per cent to 18.61 per cent as of April 30, 2025. Sugar production has reached 286.9 lakh tonnes as on April 30 of the ongoing 2024-25 season, out of which 30 lakh tonnes have been diverted for ethanol. The industry has additionally suggested evaluating the possibility of blending ethanol in diesel as a future strategy to expand ethanol use across fuel types. NFCSF noted that diverting sugar to ethanol does not reduce the actual production of sugar but helps to manage surplus sugar stocks, stabilise market prices, improve the financial health of sugar mills, and ensure timely payments to farmers.
The Hindu
13-05-2025
- Business
- The Hindu
Food vs fuel: Surge in ethanol blending and its impact on sugar prices
India is looking to increase the ethanol-blending ratio in petrol to 30% to further cut down on fossil fuel consumption, as it has met its previous target of 20% in 2025, well ahead of schedule. This would require an increase in the diversion of sugar, produced from sugarcane and other sources, for ethanol production. However, sugarcane production has been on the decline since 2022, so much so that on Thursday, the Centre approved a hike in the Fair Remunerative Price for the crop to protect the interests of farmers. Consequently, the price of sugar has risen too, pinching the pockets of consumers. Will the increased diversion of sugar for ethanol blending further reduce its availability for direct consumption and push prices even higher? Chart 1 shows the annual sugarcane production in India in the last 10 years. Following a dip in FY17 due to drought conditions in sugar-producing States, production was almost consistently increasing until it peaked at 490 crore tonnes in FY23. It declined in the following year and is estimated to further dip in FY25 as well to 435 crore tonnes. Chart appears incomplete? Click to remove AMP mode A slate of components has influenced lower production of sugarcane over the recent years, such as red-rot disease among crops in major sugar-producing States, deficient rains, and problems with the flowering of crops. This decline in production has predictably impacted the retail sugar prices across the country. Chart 2, which shows the country-wide modal retail price of one kilogram of sugar, depicts prices rising from ₹40 per kg in May 2023 to ₹45 per kg as of May 5, 2025. Ethanol blending adds to the price pressure by diverting a portion of the sugar. Government data show a rapid increase in the amount of sugarcane-based ethanol supplied for blending over the past decade, going from about 40 crore litres in FY14 to nearly 670 crore litres in FY24 (Chart 3). The practice is lauded for its sustainability-related benefits as well as its potential to reduce India's dependence on oil imports. The Centre has been implementing a long-term Ethanol Blending Programme (EBP) since the start of the 2000s, which allowed for a stagnant, then gradually increasing supply of ethanol. Initially, as a means of ensuring adequate availability of sugar for domestic consumption, the government banned the use of sugarcane juice, sugar syrup, and B-heavy molasses for ethanol production. This ban was lifted later, which explains the surge in supply in recent years. A commensurate increase can be seen in the rate at which ethanol was blended with petrol over the years. Chart 4 shows the ethanol blending rate over the last 10 years. From just over 1.5% in FY14, the rate of ethanol blending has surged to 20% in FY25. The ethanol blending ratio surged due to a combination of a consistent increase in sugar diverted for ethanol production and a drastic reduction in the goods and services tax imposed on ethanol meant for the EBP. At the time of its inception, the EBP had set the target of 20% blending to be achieved by 2030. However, upon seeing the progress attained through lifting caps and taxes, standing at 15% blended ethanol in 2024, it was decided to advance the 20% target to 2025. The ratio was reached in March this year, leading to talks of a 30% target for the coming years. With the availability of sugarcane impacted this year, reports show that the government is looking at grains to make up for the shortfall. Moreover, with sugar prices rising, the choice between food and fuel looms. Source: Lok Sabha Questions and Answers, Ministry of Petroleum and Natural Gas, Centre for Monitoring Indian Economy
