Ethanol production capacity may increase to 375-400 cr litres in 2020-21: ISMA

India achieved 5.09% ethanol blending from December 1 to June 22: ISMA. The industry body informed that B-heavy molasses and sugarcane juice have been diverted away from sugar, to manufacture and supply 58 crore litres of ethanol to OMCs from in current year upto June 22.

Source: BusinessLine | 30 June, 2020 | 11:09 AM

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Better water availability and increased acreage under sugarcane cultivation will make it possible to produce 375-400 crore litres of ethanol in 2020-21, more than double of 170 crore litres that sugar mills and distilleries promised to supply for the ethanol-blending programme (EBP) this season, the Indian Sugar Mills Association (ISMA) said on Monday.

With this expected increase in ethanol production, the government is targeting an ethanol supply target of 300-350 crore litres, enough to achieve 7.5-8 per cent ethanol blend levels with petrol in the coming ethanol season, which commences from December 2020 and runs till November 2021, it said.

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This season, ethanol manufacturers and sugar mills have entered into ethanol supply contracts with oil marketing companies (OMCs) for 170 crore litres, of which 92.5 crore litres have been supplied till June 22, helping achieve an average all India blending of 5.09 per cent. The blending levels achieved in some States, including Uttar Pradesh, Haryana, Punjab, Uttarakhand, Bihar and Karnataka, are much higher and ranged between 8.5 per cent and 9.8 per cent, ISMA said.

Significantly, many sugar mills will produce 8 lakh tonnes less sugar this year as they diverted B-heavy molasses and cane juice away from sugar production and using it for the ethanol production, ISMA added.

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While ethanol produced from B-heavy molasses and cane juice accounted for 58 crore litres in the total supply so far, another 23 crore litres are expected to come from them during the remainder of the current season, which ends on November 30,2020.

The diversion will not only reduce surplus sugar availability in the country, but also reduce the carrying costs for the sugar mills. It will also give better returns to the mills because ethanol prices fixed by the government are more remunerative than sugar currently, besides giving them better cash flows because of immediate sale of ethanol as compared to delays in the sale of sugar, which could be stuck in the godowns for more than 10-12 months.

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