Karnataka sugarcane farmers are seeking a greater role in India’s expanding ethanol economy, with the State Sugarcane Growers’ Association calling for small jaggery units to be allowed to produce ethanol. The association argues that the financial opportunities created by the country’s E20 petrol programme should not remain concentrated among large sugar mills and distilleries. Association president Kurubur Shanthakumar has suggested that local jaggery units could be provided with the technology and regulatory approvals required to manufacture ethanol, potentially allowing the fuel to be used locally in farm operations and other applications.
The demand comes against the backdrop of administered ethanol procurement prices that provide an assured market through oil marketing companies. For ESY 2025-26, ethanol produced directly from sugarcane juice or syrup is priced at ₹65.61 per litre, while ethanol from B-heavy molasses is priced at ₹60.73 per litre and C-heavy molasses ethanol at ₹57.97 per litre. The procurement price for maize-based ethanol is higher at ₹71.86 per litre. Farmers believe that enabling smaller cane-processing units to participate could allow more value addition to remain within sugarcane-growing regions. 
However, converting a jaggery unit into a fuel-ethanol producer involves significant technical and regulatory requirements. Ethanol used for petrol blending must meet the relevant BIS quality standards, including requirements for anhydrous ethanol. Production requires fermentation, distillation, dehydration, laboratory testing, safe storage and statutory approvals. Therefore, simply permitting jaggery units to produce ethanol would not be sufficient; investment in processing infrastructure, quality-control systems and possibly cooperative or common distillery facilities would also be required.
The proposal also comes as India balances sugar availability with ethanol production. A portion of sugarcane and its derivatives is diverted toward ethanol, supporting the E20 blending programme but potentially affecting sugar availability when domestic production is lower. USDA estimates that around 3.5 million tonnes of sugar equivalent could be diverted to ethanol during the 2025-26 season. With sugar supplies tightening and the government permitting duty-free raw sugar imports, the debate over how much cane should be directed toward sugar versus ethanol has gained importance.
For farmers, opening ethanol production to small jaggery units could create another avenue for local value addition. At the same time, wider participation would require clear fuel-quality regulations, compatible technology and a carefully structured feedstock policy
