The government is expected to increase the price of ethanol derived from sugarcane juice or syrup to encourage the industry to make additional investments in making ethanol, said people from the sugar industry.
Currently, the price of ethanol extracted from sugarcane juice or syrup is ₹65.60 per litre for the supply year 2022-23, which was fixed by the government at the beginning of December 2022.
The Indian Sugar Mills’ Association (ISMA) has been urging the government to raise the price of ethanol by ₹4 per litre to help it make the required investments to meet the target of achieving 20% blending with petrol by 2025. It has also been asking the government to issue a long-term policy and formula for ethanol pricing that will incentivise investments in the sector as the sugarcane Fair and Remunerative Price (FRP) or the price at which sugar mills buy sugarcane from farmers has been increased further to ₹315 per quintal for the sugar season 2023-24.
The industry needs to make an investment of ₹17,000 crore to produce 11 billion litres of ethanol from the current level of 7 billion litres, ISMA had said earlier.
Petrol blended with 20% ethanol was rolled out in February this year at select petrol pumps in 11 states and union territories as part of a broader push to increase the use of biofuels to cut emissions and lower dependence on costly crude oil imports.