Government lifts ban on ethanol production from sugarcane juice, FCI will sell 23 Lakh tonne rice to distilleries

The central government has allowed sugar mills and distilleries to produce ethanol from sugarcane juice, syrup, and B-heavy molasses for the ethanol supply year 2024-25. This decision reverses a previous ban imposed on December 15, 2023. The Director of Sugar in the Union Ministry of Consumer Affairs, Food, and Public Distribution issued the order lifting the restriction.

In addition to this, the government has approved the allocation of 23 lakh tonnes of rice from the Food Corporation of India (FCI) stock for ethanol production. Ethanol producers will be able to participate in FCI auctions to purchase this rice, which can be used as feedstock.

Last year, due to low sugar production estimates and rising prices of sugar, government disallowed sugar mills to produce ethanol from sugarcane juice, syrup and B-heavy mollesses production.

Earlier FCI stopped selling rice for ethanol production due to rising prices.

The government has set a target of 20 percent ethanol blending in petrol to 20 by 2025., which is at the level of 13 percent as per the latest data.

To ensure sufficient domestic sugar supplies, the government has also maintained a ban on sugar exports, despite industry claims that there is adequate stock for export. The industry has called for the export ban to be lifted, citing expectations of better sugar production in the upcoming season.

The government has also announced that the Food Ministry will continue to monitor sugar production in collaboration with the Petroleum Ministry to ensure a balanced approach to ethanol production and sugar supply.