The government has imposed a 50 percent export duty on molasses, resulting from the extraction or refining of sugar, with effect from January 18, 2024. This decision, taken by the government, is in response to a sugarcane shortage caused by deficit monsoon rains.
The Indian government is ambitious about attaining 20 percent ethanol-blended petrol by 2024-25 and 30 percent by 2029-30. 50 per cent export duty on molasses, supported by various sugar industry bodies, could enhance the availability of ethanol-blended petrol.
While speaking to ChiniMandi, Tarun Sawhney, Vice Chairman & Managing Director at Triveni Engineering and Industries Ltd welcoming the move by government, said, “We applaud the Government’s strategic decision of imposing a 50% duty on molasses exports. The decision will help secure a robust domestic molasses supply for ethanol production. As a key player in the ethanol industry, we understand the imperative to prioritize domestic utilization of C-heavy molasses, particularly in the wake of recent uncertainties in sugar exports and temporary directives on biofuel feedstock. This bold step aligns seamlessly with our shared vision of achieving a 20% ethanol-blended petrol by 2025-26, crucial for both energy security and environmental sustainability. We commend the Government’s foresight in navigating the complexities of the international market and addressing the need for a resilient and self-reliant ethanol production ecosystem in India.”
The Food Ministry in early December directed sugar mills not to use cane juice or syrup to produce ethanol. In a U-turn, the central government in mid-December allowed the utilisation of juice as well as B-heavy molasses to produce ethanol but capped the diversion of sugar at 17 lakh tonnes for the current season.
The ethanol production capacity in the country is about 1380 crore litres out of which about 875 crore litres is molasses based and about 505 crore litres is grain based.
In order to achieve the target of 20 per cent blending by 2025, about 1016 crore litres of ethanol is required and total requirement of ethanol including for other uses is 1350 crore litres. For this, about 1700 crore liters of ethanol producing capacity is required to be in place by 2025 considering plant operates at 80% efficiency. The Government has estimated the demand of ethanol required for 20% blending by 2025 keeping in view the growth of petrol-based vehicles in two-wheeler and passenger vehicle segments& the projected sale of Motor Spirit (MS).
