The sugar industry in India has undergone a significant transformation in recent years, transitioning from its traditional role as a provider of sugar to households and bulk consumers to becoming a key player in the country’s liquid energy generation.

Also read: Editorial. A higher FRP may not fix the sugar sector’s woes

This transformation is primarily driven by the production of ethanol biofuel from sugarcane juice and sugarcane molasses. Ethanol biofuel, when blended with petrol, is utilised as automobile fuel, powering cars and other vehicles running on petrol.

The multifaceted benefits of ethanol biofuel have been extensively documented, positioning it as an effective substitute for the costly and environmentally harmful crude oil that India traditionally imports as conventional automobile fuel. According to government data for the fiscal year 2022-23, the production of approximately 502 crore litres of this indigenously produced biofuel has resulted in a substantial saving of ₹24,300 crores in foreign exchange, significantly contributing to the country’s enhanced energy security.

Challenges at hand

India’s ethanol blending programme has made commendable progress, reaching over 10 per cent blending, with aspirations to achieve 20 per cent blending in the next two years, aligning with the ambitious targets set by Prime Minister Narendra Modi. However, despite these advancements, challenges remain, particularly in ensuring a steady supply of sugarcane, a critical component in ethanol production.

Sugarcane farmers play a pivotal role in the ethanol blending programme, enjoying cost and return advantages over other crops. The Sugarcane Control Order mandates sugar mills to purchase sugarcane within their catchment area, ensuring virtually every stick of sugarcane is bought and farmer paid in full and well in time. Returns to the farmers are better than any other crop sown in the same field and with buyers assuring 100 per cent market for their produce, motivates the farmers to continue to sow the crop year after year.

Sugar mills, the manufacturers of ethanol, have significantly expanded their ethanol production capacity since the government’s introduction of various schemes giving financial incentives to the mills and a ready market for their produce in the form of OMCs (Oil Marketing Companies). The total installed ethanol production capacity from molasses-based distilleries now stands at an impressive 780 crore litres.

Impact of output on policies

However, achieving the target of 20 per cent ethanol blending and beyond poses a challenge, primarily due to the dependence on sugarcane crops and the impact of variable monsoon patterns. States of Maharashtra and Karnataka face production challenges due to erratic monsoon, affecting sugarcane yields. Uttar Pradesh, blessed with multiple rivers, maintains well-moistured sugarcane fields, illustrating regional discrepancies. One unfavorable weather event like the recent sugar season of 2023-24 exemplifies the impact of lower sugar production on domestic policies.

Poor monsoon led to reduced sugar production in Maharashtra and Karnataka, prompting the government to enforce restrictions on sugar exports and ethanol production from specific sources only. Such events put the industry on the back foot and put them in a dilemma about further potential expansion but then from the perspective of food for the people at affordable prices is the priority and food shall always be the ultimate winner pushing fuel behind.

Also read: India rules out easing curbs on cane juice for ethanol

To address these challenges, increased investment in Research and Development (R&D) is crucial. Collaborations with prominent Indian Cane Research Institutes such as NSI (Kanpur) and SBI (Coimbatore) can yield newer, higher-yielding sugarcane varieties that are drought-resistant and pest-resistant. Earlier success in Maharashtra through CO 265 and then in Uttar Pradesh with CO 238 sugarcane varieties, the farmer and industry has achieved higher yields and sucrose recovery, contributing to increased sugar production. Thus, paving the path for a ethanol blending target. Similar work needs to be continued to achieve 20 per cent blend target in the near future.

Shifting focus to maize

It shall not be possible for sugarcane alone to take the country towards the 20 per cent blend target but will need the support of grain ethanol too, to make an equal or sizeable contribution. Rice is the food of the masses which is to be used to feed the stomachs first and then fill the petrol tanks.

Thus, emphasis needs to shift towards increasing maize production primarily through varietal changes increasing the agri yields using the same amount of land. Incentives need to be given to the farmer to sow more maize too, to help ethanol manufacturers use it as a prominent raw material and also help them by fixing a lucrative ethanol price produced from maize to maximise their production capacities.

Also read: Early start to season, curbs on supplying ethanol help India’s sugar production to reach 22.4 mt

In conclusion, while India’s ethanol blending programme has made commendable strides, a concerted effort involving farmers, sugar mills and the government is necessary to address challenges and unlock the full potential of ethanol production. Continued investment in R&D and sustainable agricultural practices will play a pivotal role in ensuring the success of this transformative initiative.

The author is founder, Greenleaf, a product of GL Agro Research Pvt Ltd