Cabinet decision: Sops for more ethanol output from sugarcane

Announcing the Cabinet Committee on Economic Affairs’ decision to provide incentives for production of ethanol from sugarcane, Petroleum Minister Dharmendra Pradhan has said the government will offer a higher rate to those who produce 100 per cent ethanol from sugarcane, without producing any sugar.

Pradhan said that the government wants to “encourage” the production of ethanol, so that less sugar is produced. “The amount of sugar being produced in the country, it is leading to sugar surplus,” he said. To reduce the production of sugar to the amount that is needed, the government has announced “three progressive” rates for ethanol.

For ethanol derived from B heavy or B grade molasses, the price has been raised from Rs 47.49 to Rs 52.43 for every litre. The ex-mill price for ethanol produced from 100 per cent sugarcane juice, so that no sugar is produced from it, is Rs. 59.19 per litre.

However, ethanol produced from C heavy or C grade molasses will be priced at Rs 43.46 per litre compared to Rs 43.70 earlier.

The rates will be effective for the 2018- 2019 sugar season and ethanol supply year from December 1, 2018, to November 30, 2019. In a statement released later the government said that the OMCs are advised to “prioritise ethanol from 1) 100 per cent sugarcane juice, 2) B heavy molasses / partial sugarcane juice, 3) C heavy molasses and 4) Damaged Food grains/other sources, in that order.” Apart from reducing excess sugar in the country and increasing liquidity with the sugar mills for settling cane farmer’s dues the incentives will also help in making higher ethanol available for Ethanol Blended Petrol (EBP) Programme, the statement said.