Mumbai: Former Maharashtra minister Rajesh Tope has raised concerns over the possible impact of government restrictions on ethanol production from sugarcane juice and B-heavy molasses in the state. He warned that any move to limit the use of these feedstocks could put the financial viability of sugar-based ethanol distilleries under pressure.
Tope said sugar factories across Maharashtra have invested thousands of crores of rupees in ethanol production capacity in response to the Centre’s E20 ethanol blending programme. According to him, restrictions on sugarcane juice and B-heavy molasses could create difficulties for distilleries in securing adequate feedstock, while their fixed operating costs and financial obligations would continue. 
The former minister cautioned that lower utilisation of distilleries could affect cash flows and make it harder for sugar mills to service bank loans taken for ethanol projects. He said the issue needs to be considered carefully as Maharashtra’s sugar industry has made significant investments based on the policy direction supporting ethanol blending and diversification.
The concerns come amid discussions over restricting the use of sugarcane juice and B-heavy molasses for ethanol production following a rise in domestic sugar prices. Industry stakeholders have also highlighted the potential financial impact of any sudden change in ethanol feedstock policy, particularly on distilleries that have invested heavily in capacity.
The proposed restrictions could therefore have wider implications for Maharashtra’s sugar and ethanol sector, including investment recovery, debt servicing and the utilisation of newly created distillery capacity.
