The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a 3 per cent rise in C Heavy Molasses (CHM) for the ethanol supply year 2024-25 (November-October).

The price will now be ₹57.97 a litre against ₹56.58 earlier. There is no change in prices of ethanol from maize and itwould continue at ₹71.86 a litre. For ethanol from sugarane juice/syrup, the price will be ₹65.61, for damaged foodgrain (rice) ₹64 , and the renewable fuel from B-Heavy molasses it will be ₹60.73 a litre, respectively. For ethanol from FCI’s subsidised rice, the price remains at ₹58.50/litre.

CHM contains little sugar and it is the end product of processing in the sugar industry.

Meeting blending target

“The approval will not only facilitate the continued policy for the Government in providing price stability and remunerative prices for ethanol suppliers but will also help in reducing dependency on crude oil imports, savings in foreign exchange and bring benefits to the environment. In the interest of sugarcane farmers, as in the past, GST and transportation charges would be separately payable,” a government statement said. Also, increase in prices of CHM Ethanol by 3 per cent will assure sufficient availability of ethanol to meet the increased blending target.

Asked if the unexpected move has come due to the lower sugar production estimate of All-India Sugar Trade Association, its Chairman Praful Vithalani said: “Yes, we can say it is a precautionary step. Government may have realised it as alarming due to less availability of closing stock .” By opting to not increase ethanol prices when made from syrup and B-heavy molasses (BHM) government may be thinking to have more sugar production, as there is no sugar in C-heavy molasses.

Over the past few years, sugar companies have been making ethanol from B-heavy molasses or directly from sugarcane juice/syrup. Before this, they made ethanol from CHM.

Forex savings

The Government has been implementing Ethanol Blended Petrol (EBP) Programme wherein OMCs (Oil Marketing Companies) sell petrol blended with ethanol up to 20 per cent. This is being implemented across the country to promote the use of alternative and environment-friendly fuels. This intervention also seeks to reduce import dependence for energy requirements and give boost to agriculture sector. During the last ten years (as on December 31, 2024), ethanol blending of petrol by Public Sector OMCs has resulted in approximate savings of over Rs.1.13 lakh crore of foreign exchange and crude oil substitution of about 193 lakh tonnes.

Ethanol blending by Public Sector Oil Marketing Companies (OMCs) increased from 38 crore litre in 2013-14 ethanol supply year (ESY) to 707 crore litre in 2023-24 ESY, achieving an average blending of 14.60 per cent. The government has advanced the target of 20 per cent ethanol blending in petrol from early 2030 to 2025-26 ESY and a “Roadmap for ethanol blending in India 2020-25” has been put in public domain.

As a step in this direction, OMCs plan to achieve 18 per cent blending during the current ESY . Other recent enablers include enhancement of ethanol distillation capacity to 1,713 crore litre per annum, long-term off-take agreements (LTOAs) to set up dedicated ethanol plants (DEPs) in ethanol deficit States; encouraging conversion of single feed distilleries to multi-feed; availability of E-100 and E-20 fuel; launch of flexi fuel vehicles etc. All these steps add to the ease of doing business and achieving the objectives of Atmanirbhar Bharat, the statement said.

Related Topics