Rs 35K crore subsidies needed to meet 2030-31 ethanol-blending target

The Indian Sugar and Bio Energy Manufacturers Association (ISMA), in a road map presented to the government recently, said the country would need to increase subsidies to nearly Rs 35,000 crore to create an additional 7.70 billion litres of ethanol capacity from sugarcane to achieve blending levels of 20 to 25 per cent by the 2030-31 ethanol supply year (ESY). The ESY runs from November to October.

 

To achieve the target of 25 per cent blending by 2030-31, a total production capacity of 29.52 billion litres would be required, of which sugarcane would contribute approximately 16.24 billion litres (55 per cent), with the remainder coming from grains. 

 

At present (2024-25 ESY), India has an ethanol production capacity of around 16.83 billion litres, with ethanol from molasses accounting for around 8.53 billion litres, while the rest is put up by grain ethanol makers.

 

ISMA has also called for reducing the GST on flex-fuel vehicles to 5 per cent and differential pricing on ethanol. Also, senior ISMA officials advocated for revising the minimum sale price of sugar, a fresh pricing for ethanol for 2024-25 supply year, and addressing the issue of falling prices of sugar. They said the declining sugar prices are expected to further increase the cane dues.