India’s biofuel industry is calling for a major increase in government funding in the upcoming budget as it struggles with weak prices and limited growth in ethanol production. The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has urged the government to allocate between ₹15,000 and ₹20,000 crore to support advanced biofuel projects.
ISMA Director General Deepak Ballani said the funds are needed to push technologies such as second-generation ethanol and sustainable aviation fuel (SAF), especially through pilot projects and innovation. He explained that while sugar production in the country remains strong, the industry is under stress due to falling prices and reduced diversion of sugar into ethanol.
Ethanol blending has been a key tool to manage excess sugar stocks and ensure timely payments to farmers. However, current challenges have limited its effectiveness. ISMA has also flagged concerns over rising sugar inventories and declining ex-mill prices, which are squeezing mill margins.
To stabilise the sector, the association has asked for revisions in ethanol pricing and minimum support prices for sugar. It has also suggested lowering GST on flex-fuel vehicles to encourage cleaner fuel adoption and support India’s clean energy goals.
ISMA noted that exporting sugar is becoming increasingly difficult due to global price differences, making domestic policy support even more critical for the survival and growth of the biofuel and sugar industries.
