In a major policy shift, the government has lifted all restrictions on producing ethanol from sugarcane juice, syrup, and molasses for the 2025–26 Ethanol Supply Year, starting November 1.
Boost to Clean Energy and Renewable Fuel Goals
The decision marks a significant push toward accelerating renewable fuel production and supporting India’s clean-energy transition.
Why the Restrictions Were Lifted
Earlier, policymakers limited ethanol production from sugarcane because they feared lower yields and wanted to ensure adequate sugar supply for domestic consumption. However, two consecutive good monsoons have boosted sugarcane output, giving policymakers confidence to allow unrestricted diversion of cane for ethanol manufacturing.
Government to Monitor Sugar Availability
The Ministry of Consumer Affairs, Food and Public Distribution emphasized that it will closely monitor sugar availability to maintain balance between ethanol production and consumer demand.
Aligned with India’s Blending Target
The move aligns with India’s target of achieving 20% ethanol blending with petrol by 2025–26—a crucial step to reduce dependence on fossil fuels, cut carbon emissions, and strengthen energy security.
Industry Welcomes Move
Industry players have welcomed the decision but urged a review of ethanol procurement prices. A miller from Maharashtra stressed that fair pricing is essential to safeguard farmers’ income, as cane prices remain fixed.
Higher Demand
Sugar producers such as E.I.D.-Parry, Balrampur Chini Mills, and Shree Renuka Sugars have already expanded ethanol production capacities. Bajaj Hindusthan and Dwarikesh Sugar are also scaling up in anticipation of increased demand.
The Benefits
Knnindia.co.in reported that the policy will benefit both the sugar industry and the energy sector. It will provide farmers with additional income streams and help India move closer to its renewable energy targets.
