Public sector oil marketing companies announced a lucrative incentive of ₹6.87 per litre to encourage the production of ethanol from C-heavy molasses, a by-product of sugar factories. The initiative aims to promote a green economy by utilizing C-molasses effectively for ethanol production. The incentive is expected to boost ethanol production through the C molasses route, contributing to the overall availability of ethanol for the ethanol blended petrol programme.
In early December 2023, the food ministry directed sugar mills to refrain from using cane juice or syrup for ethanol production. However, in mid-December, the central government allowed the use of juice and B-heavy molasses for ethanol production while restricting the diversion of sugar to seventeen lakh tons for the current marketing season.
The government has set ambitious targets of achieving twenty percent ethanol-blended petrol by 2024-25 and thirty percent by 2029-30. Despite these goals, there are concerns about potential setbacks due to the cessation of ethanol production from sugarcane juice in 2023-24, as noted by Crisil.
In India, the production of ethanol is diverse, with ethanol from cane juice representing 25-30%, B-heavy molasses contributing over 60-65%, and the remaining portion coming from C-heavy molasses and grains.
The government has already implemented a phased rollout of twenty percent blended fuel (E20) in April 2023, and wider availability is anticipated in the coming days. As reported by ThePrint, the introduction of E20 blending in petrol by the government aims to address issues such as reducing the country’s oil import costs, enhancing energy security, lowering carbon emissions, and improving air quality. Notably, the government accelerated the target for E20 fuel from 2030 to 2025.
