Scheme Notified for Cooperative Sugar Mills to Convert Sugarcane-Based Ethanol Plants to Multi-Feedstock Units

The Government of India has notified a scheme to support Cooperative Sugar Mills (CSMs) by providing interest subvention for converting their existing sugarcane-based ethanol plants into multi-feedstock based plants. This initiative aims to enhance the financial viability and operational efficiency of CSMs by allowing the use of alternative feedstocks such as maize and damaged food grains (DFG), ensuring year-round ethanol production.

The Department of Food & Public Distribution has introduced this scheme under the modified Ethanol Interest Subvention Scheme. Under this scheme, the government will provide an interest subvention of either 6% per annum or 50% of the interest rate charged by banks and financial institutions, whichever is lower, for a period of five years, including a one-year moratorium. The loans will be provided by banks and financial institutions.

Currently, sugar mills operate for only 4-5 months a year due to the limited sugarcane crushing season, impacting overall efficiency and productivity. To ensure the continuous operation of CSMs, their existing ethanol plants can be converted into multi-feedstock units under the modified scheme, allowing them to process grains like maize and DFG.

The conversion to multi-feedstock plants will enable CSMs to remain operational even when sugar-based feedstocks are unavailable. This will enhance efficiency, boost productivity, and improve cash flows for Cooperative Sugar Mills.

This initiative aligns with the Ethanol Blended Petrol (EBP) Programme, which targets 20% ethanol blending with petrol by 2025. Since July 2018, the government has been implementing various initiatives to expand ethanol production capacity across the country.