Sugar diversion towards ethanol crucial: Centre

Addressing the biofuel fraternity at the India BioEnergy and Technology Exhibition at Yashobhoomi in New Delhi, Ashwini Srivastava, Joint Secretary (Sugar), Department of Food and Public Distribution, said that the central government has focus on ethanol production. Responding to questions on sugar exports for 2025–26, he said ethanol diversion remains the priority of the government.

“For the upcoming sugar season, surplus production is expected with ISMA projecting 350 LMT and states estimating around 340 LMT. The first advance estimates from the Agriculture Ministry in October will give a clearer picture. About 45–50 LMT of sugar is likely to be diverted to ethanol, after which the sugar balance-sheet will be reviewed before deciding on exports,” Srivastava stated.

Deepak Ballani, Director General, Indian Sugar & Bio-energy Manufacturers Association (ISMA), highlighted the need to revise sugar MSP and ethanol procurement prices, which have been stagnant. He said that ethanol prices from B-heavy molasses and sugarcane juice should be raised by at least Rs 5 per litre to keep production viable. Similarly, the MSP of sugar must be increased to Rs 40 per kilo by October–November to ensure fair returns, he stated.

On exports, Ballani said earlier shipments had supported the industry but stressed the need for balance between ethanol diversion, exports and MSP. He recommended allowing 2 MMT of sugar exports for next season in a phased manner.

Speaking on Sustainable Aviation Fuel (SAF), Ballani pointed to ISMA’s SAF Roadmap study with Deloitte, noting that “alcohol-to-jet (ATJ) is the only feasible pathway for higher blending.” He called for a transparent pricing and offtake mechanism to attract private investment and position India as an export hub.

Roshan Lal Tamak, Executive Director & CEO, DCM Shriram Sugar, mentioned the sugar industry is well-placed to support SAF, PLA, and CBG production due to its integrated ecosystem of ethanol, bagasse and press mud. However, Tamak stressed the need for conducive policies to make these ventures viable and attractive for investment. Faster adoption of SAF by OMCs, he said, would not only cut emissions but also deliver socio-economic benefits to farmers. He also underscored the urgent need to boost cane productivity, promote mechanisation, and create a dedicated body to oversee varietal development.

GEMA wants govt to discourage fresh investments

Meanwhile, the Grain Ethanol Manufacturers Association (GEMA) has urged the government to discourage fresh investments in grain-based ethanol plants, warning of potential overcapacity. Out of 400 ethanol manufacturers, 250 are grain-based. While industry capacity stands at 1,700 crore litres, OMCs procure only about 1,100 crore litres annually.