The Indian government has decided to partially lift the ban on the use of sugarcane for ethanol, providing much-needed relief to sugar companies. Prabhakar Rao, President of the Indian Sugar Mills Association (ISMA), stated that the government’s decision allows approximately one third of the total quantity offered to be used for ethanol production. This move is expected to bring some respite to the industry, especially for those companies that have invested in ethanol production based on the government’s ethanol branding program.

Rao mentioned that the ban on the use of sugarcane juice and B-heavy molasses was a major setback for the industry, as it affected the production of ethanol from these sources. However, with the government’s new decision, approximately 1.7 million tons of sugar will be converted to ethanol, providing some relief to the affected companies.

According to Rao, the allocated capacity for ethanol production is expected to be met within a few days, possibly before January or during the first and second weeks of the month. He added that the government may allocate more quantity based on the actual data and requirements of the industry. However, Rao also emphasized that the allocated capacity is still far less than the total capacities created by the industry.

The ethanol branding program launched by the government is an ambitious initiative aiming to promote ethanol production and reduce the country’s dependence on fossil fuels. The program has received significant commitments from the industry, resulting in substantial investments in establishing ethanol production capacities.

Looking ahead, Rao highlighted the need to address the challenges faced by the industry and find solutions for the future. He stated that the government should consider extending the allocation of sugarcane for ethanol production beyond March, as well as provide visibility for the industry post-April.

In conclusion, the partial lifting of the ban on the use of sugarcane for ethanol is expected to provide some relief to sugar companies and boost the ethanol business in the near term. However, there is still a long way to go to fully utilize the capacities created by the industry and overcome the challenges faced by the sector.