The government may allow around 28 crore litres of ethanol from now on to be produced from sugarcane juice (SCJ) as per the indicative revised allocation for SCJ and b-heavy molasses (BHM) released by the Oil Marketing companies (OMCs).

As per the indicative allocation list, the OMCs have allocated 42.56 crore litres to be produced from SCJ for which 7 lakh tonnes(lt) of sugar will be diverted. For BHM, a quantity of 114.76 crore litres has been allocated that will lead to 10 lt of sugar diversion. This allocation is for two quarters-November 2023-April 2024 period.

Sources said that around 15 crore litres of ethanol has already been made from sugarcane juice before the December 7 ban was imposed. Hence, from now on, around 27.56 crore litres more needs to be produced to meet the revised allocation.

Earlier, the OMCs had allocated 135.43 crore litres of ethanol to be produced from SCJ, and 130.13 crore litres from BHM for the same period.

The indicative revised allocation by the OMCs may now facilitate limited quantities of SCJ for producing ethanol. The Food Ministry may have to issue an order accordingly, since the ban was not lifted.

Price increase

Commenting on the development, Shree Renuka Sugars Executive Director Ravi Gupta said “With this allocation issue behind us, now important thing is that increase in ethanol price is declared immediately so that industry may plan ethanol production.”

On December 7, the government banned sugar mills and distilleries from using sugarcane juice or sugar syrup for producing ethanol with immediate effect to ensure adequate availability of sugar for domestic consumption. However, the ban is a “temporary pause” due to a lack of clarity on sugar output for the current season.

In order to achieve the target of 20 per cent blending by 2025, about 1,016 crore litres of ethanol is required and total requirement of ethanol including for other uses is 1,350 crore litres.

For this, about 1,700 crore liters of ethanol producing capacity is required to be in place by 2025 considering the plant operates at 80 per cent efficiency.

The Government has estimated the demand of ethanol required for 20 per cent blending by 2025 keeping in view the growth of petrol-based vehicles in two-wheeler and passenger vehicle segments and the projected sale of Motor Spirit (MS).