Context

The government's recent decision to ban the use of sugarcane juice and sugar syrup for ethanol production comes a week after the industry requested a reversal of the decision.

Key Highlights

• Policy Reversal: The government has reversed its decision to ban the use of sugarcane juice for ethanol production, allowing its utilization along with B-heavy molasses. However, sugar diversion for ethanol is capped at 17 lakh tonnes.
• Temporary Capping: The cap on sugar diversion will be applicable for the 2023-24 supply year, ending in October next year. The decision follows a week of industry protests against the initial ban on cane juice and sugar syrup for ethanol.
• Flexibility for Sugar Mills: Sugar mills are now granted flexibility in using both sugarcane juice and B-heavy molasses within the 17 lakh tonnes cap for ethanol production in the ongoing supply year.
• Modalities Under Consideration: Officials are working on determining the proportion of cane juice and molasses for ethanol production. Some ethanol has already been produced using cane juice in the current supply year.
• Industry Representation: The reversal comes after representations from the sugar industry to review the earlier ban, emphasizing its impact on ethanol production and financial strain on mills.
• Concerns and Challenges: The government's decision is prompted by concerns over low cane production, exacerbated by recent drought conditions in Maharashtra and Karnataka.
• Ethanol Blending Target: Despite challenges, officials express confidence in achieving the 15% ethanol blending target with petrol in the 2023-24 supply year.
• Review of Sugarcane Juice Ban: Acknowledging industry distress, officials assure a review of the ban on sugarcane juice, emphasizing its temporary nature and the need for national interest.
• Industry's Financial Strain: The Indian Sugar Mills Association urges the government to revise ethanol prices from B-heavy and C-heavy molasses to support millers financially.
• Price Revision Demands: Industry demands include raising ethanol prices from B-heavy molasses to ?64 per litre and from C-heavy molasses to ?58-59 per litre.