The Indian government is unlikely to lift the ban on B-heavy molasses (BHM) for its use as a feedstock to produce ethanol as there is risk of rise in sugar prices due to sentimental value, even if the country now has ample sugar to allow the relaxation to distilleries.

Though the government agrees with the reasoning of the distilleries to allow B-heavy molasses (BHM) for ethanol, the timing may not be right to take such a decision when election process has started, sources said.

Besides, there is no harm if the ban is lifted after two months as whatever stock the mills and distilleries have will add some storage costs, the sources said, adding they used to keep stock of BHM to process it later once sugarcane crushing is over by April.

The ethanol supply year (ESY) runs from November to October and distilleries keep the processing throughout the year, depending on feedstock availability.

EBP 12% this season

On December 7, 2023 the government banned sugar mills and distilleries from using sugarcane juice/syrup and BHM for producing ethanol with immediate effect to ensure adequate availability of sugar for domestic consumption.

Industry estimates show that distilleries and sugar mills have a stock of about 8 lakh tonnes (lt) of BHM as of now which is enough to produce about 25 crore litres of ethanol. The government would like to see this BHM converted to ethanol once the pressure on price control eases, the sources said.

Official sources said the current ethanol blending with petrol (EBP) is close to 12 per cent, so far in current ethanol supply year (ESY) and may not be lower than 12 per cent in the entire season as it was achieved in 2022-23 ESY.

The government is expecting India’s sugar production to be 310 lt in 2023-24 sugar season (October-September) as already 295 lt has been produced until March 31. Against a consumption estimate of 280 lt, there will be a surplus of 30 lt this season and with carry over stock of 57 lt from previous season, there will be ample availability, sources said.

Distilleries stuck

Whatever BHM has already been produced, it has to be converted to ethanol or some other product as there is no point in just keeping it unutilised, an industry source said. Since there is a complete ban on production of even rectified spirit (RS)/extra neutral alcohol (ENA) from sugarcane juice and B-heavy molasses, the distilleries are stuck now, the industry official said.

The Food Ministry in December last year issued detailed guidelines for ethanol and spirit production during 2023-24 sugar season (October-September) to ensure that the ban on those particular feedstocks’ use is enforced by States.

Ethanol is produced from different feedstocks such as C-heavy molasses (CHM), B-heavy molasses (BHM), sugarcane juice/sugar syrup/sugar, surplus rice of FCI (currently not allowed), damaged food grains like broken rice and maize.

Sugar mills used to prefer BHM as against CHM since they get 25 per cent less ethanol when produced from CHM, which has least sucrose content. Mills get more sugar when they use BHM as byproduct for ethanol.