IFGE demands long term – balanced ‘Ethanol Procurement Policy’ as Govt stops sugar diversion for ethanol

The Indian Federation of Green Energy (IFGE) has called for a balanced and predictable ethanol procurement policy that safeguards the interests of both grain-based and sugar-based ethanol industries. The recent Oil Marketing Companies (OMCs) tender for approximately 1,100 crore litres of ethanol, excluding sugarcane juice- and B-heavy molasses-based ethanol, highlights the need for procurement decisions that respond to feedstock availability without creating uncertainty for either sector.

Through the decision of the Government to shift procurement for 2026 – 27 to Grain based Ethanol is due to decrease in sugarcane yield, IFGE emphasises that sourcing priorities should remain flexible and responsive to sugarcane availability in subsequent seasons.

Sanjay Ganjoo, Director General, IFGE, said “Both grain-based and sugar-based ethanol are essential to India’s ethanol blending programme. Policy decisions must ensure a level playing field for both sectors. The prevailing grain prices and reduction in the Rs 3 per litre incentive warrant a review to maintain the commercial viability of grain-based distilleries and sustain investment in ethanol production.”

Ravi Gupta, Chairman, Sugar Bioenergy Forum of IFGE, said “C-heavy molasses-based ethanol remains an important feedstock as it does not divert sugar from domestic consumption. Its procurement price of Rs 7.97 per litre remains unchanged despite rising sugarcane Fair and Remunerative Price (FRP) and operating costs. We recommend a timely revision of this price to reflect rising costs and ensure continued supplies. In addition, the Minimum Selling Price (MSP) of sugar should be revised to reflect increasing production costs and improve the financial sustainability of sugar mills, enabling them to meet their obligations to sugarcane farmers.”

IFGE calls for a balanced, predictable and cost-reflective policy framework that safeguards domestic sugar availability, supports grain-based ethanol production, ensures fair returns to sugar mills and farmers, and sustains investment across India’s ethanol value chain.