Ethanol Expansion: A Sweet Jackpot for Sugar Farmers
The Indian government has lifted the cap on ethanol production from sugar for 2025-26, heralding benefits for farmers through timely sugar cane payments and price stabilization. The change is expected to boost ethanol output, balance sugar stocks, and support domestic biofuel initiatives, benefitting the entire sugar industry.
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The sugar industry has applauded a recent decision by the Indian government to lift the restrictions on ethanol production from sugar for the 2025-26 period. The move is perceived as a financial boon for farmers, potentially ensuring timely sugar cane payments while maintaining stable sweetener prices.
On September 1, the Food Ministry announced a significant policy shift by removing the 4 million tonne cap on sugar diversion for ethanol production, effective in the Ethanol Supply Year (ESY) 2025-26. This decision marks a departure from the previous limits observed in ESY 2024-25.
According to industry leaders, the allowance to produce ethanol from various sugar by-products will assist in maintaining sugar supply balance and regulating prices. Furthermore, the decision aligns with ongoing government strategies to enhance ethanol blending in fuel, moving towards the revised 20% blending target set for ESY 2025-26.
(With inputs from agencies.)
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