Target of 27% Ethanol Blending Beyond Sugar Industry's Reach

New Delhi. While the Central Government has announced plans to progressively raise the ethanol blending target in petrol to 27 percent, experts argue that this goal is beyond the sugar industry's capacity and could create a new set of challenges for the sector.

In reality, sugarcane yields in the country fluctuate, and the government prefers to prioritize sugar production over ethanol production. With sugar production falling short of domestic demand and consumption for two consecutive seasons (2024-25 and 2025-26), India was compelled to import sugar from abroad for the first time in nearly a decade. Given this context, the government is unlikely to take hasty risks that could expose the sugar industry's vulnerabilities, especially since the outlook remains grim for the current period as well.

It is true that ethanol production utilizes a wide range of feedstocks—including sugarcane derivatives (cane juice, syrup, B-heavy molasses, and C-heavy molasses) alongside maize, rice, damaged grains, and low-quality potatoes. Therefore, while the sugar industry would not be the sole contributor to achieving the 27 percent blending target, it would certainly play a pivotal role.

The use of maize and rice in ethanol production is rising, whereas the utilization of sugarcane-based feedstocks fluctuates. Separate supply quotas are allocated for ethanol produced from each of these feedstocks; consequently, the government would find it difficult to decide on increasing the quota for sugarcane-based ethanol.

Industry analysts view the achievement of the 20 percent ethanol blending target five years ahead of schedule as a policy triumph, though it has also provided the government with a valuable lesson.