The Indian Federation of Green Energy (IFGE) has called for a long-term, predictable and balanced ethanol procurement policy that supports both grain-based and sugar-based ethanol industries, urging the government to review procurement prices and incentives in view of rising input costs.
The industry body’s statement comes after Oil Marketing Companies (OMCs) issued a tender for approximately 1,100 crore litres of ethanol, excluding ethanol produced from sugarcane juice and B-heavy molasses. IFGE said procurement decisions should reflect feedstock availability while providing policy certainty to both sectors.
Acknowledging the government’s decision to shift ethanol procurement towards grain-based sources for the 2026–27 supply year amid a decline in sugarcane yield, IFGE emphasised that sourcing priorities should remain flexible and responsive to sugarcane availability in subsequent seasons.
Called for a Level Playing Field
Sanjay Ganjoo, Director General of IFGE, said both grain-based and sugar-based ethanol were essential to India’s ethanol blending programme and called for a level playing field for both industries. “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,” Ganjoo said.
IFGE’s demand comes amid concerns over the commercial viability of grain-based distilleries due to input costs and changes in government incentives. The federation stressed that a stable procurement framework was necessary to sustain investment and support the continued expansion of ethanol production capacity.
Ravi Gupta, Chairman of IFGE’s Sugar Bioenergy Forum, called for a revision of the procurement price for ethanol produced from C-heavy molasses, highlighting its role in supporting the ethanol blending programme without diverting sugar from domestic consumption.
According to Gupta, the procurement price for C-heavy molasses-based ethanol remains unchanged at Rs. 57.97 per litre despite increases in sugarcane Fair and Remunerative Price (FRP) and operating costs. He called for a timely revision of the price to reflect rising costs and ensure uninterrupted supplies.
Gupta also urged the government to revise the Minimum Selling Price (MSP) of sugar in line with increasing production costs. He said a higher MSP would improve the financial sustainability of sugar mills and help them meet their payment obligations to sugarcane farmers.
Need for a Predictable Policy Framework
IFGE said ethanol procurement policies should balance the interests of grain-based distilleries, sugar mills and sugarcane farmers while protecting domestic sugar availability. The federation called for a cost-reflective framework that provides fair returns to sugar mills and farmers, supports grain-based ethanol production and encourages investment across the ethanol value chain.
The demand highlights the policy challenge of balancing India’s ethanol blending ambitions with feedstock availability, domestic sugar requirements and the financial viability of ethanol producers.