The Indian Sugar and Bio-energy Manufacturers Association (ISMA) has urged the central government to simplify and reduce GST rates and provide focused policy support to promote biofuels and clean mobility in the country.
Speaking in Pilibhit on Wednesday, ISMA said these measures would help cut carbon emissions, protect farmer incomes, reduce India’s dependence on imported crude oil, and speed up progress towards the country’s net-zero targets.
As part of a 10-point proposal, the association recommended transforming the sugar industry into a multi-purpose bio-energy hub. It also called for lowering GST on flex-fuel vehicles (FFVs), ethanol fuels, and related equipment, while bringing the tax treatment of hybrid electric vehicles in line with that of fully electric vehicles.
ISMA Director General Deepak Ballani said the proposals could lead to immediate reductions in carbon emissions by using existing ethanol supplies, production capacity, and vehicle technologies—without waiting for new infrastructure to be built.
Key suggestions include reducing GST on FFV two-wheelers and small cars to 5% to make them as affordable as petrol vehicles, cutting GST on E85 and E100 ethanol to 5% so fuel prices remain competitive, and lowering GST on ethanol-related machinery to encourage industry growth.
ISMA also asked for ₹200 crore in financial support to expand advanced biofuels such as sustainable aviation fuel, bio-hydrogen, and isobutanol, including funds for testing and validating new technologies. In addition, it proposed a ₹2,000 crore fund to help convert sugar mills into integrated bio-energy hubs.
Ahead of the Union Budget 2026–27, the association also called for a national policy on sustainable aviation fuel, fiscal incentives for the sector, the creation of a Bharat Biofuels Alliance, and viability gap funding for green hydrogen projects.
