Why sugar mills are worried about ethanol import and multi-feed distilleries
India’s sugar industry, especially in Maharashtra, fears losses if duty-free ethanol imports from the US are allowed under a new India-US trade deal. Domestic mills say cheaper imported ethanol—at ₹40–45/litre versus ₹57.97 for local C-heavy molasses-based ethanol—could undercut them. Millers also worry about pressure to shift to costlier, multi-feed ethanol plants using grains like maize.
As talks about a trade deal between India and USA makes its way through twists and turns, the sugar industry especially in Maharashtra is worried about the country allowing for the duty free import of ethanol from the US. This comes even as the government continues to push for mills to opt for multi-feed ethanol plants that could allow mills to run on other feed stocks.
While importing ethanol from USA is not new, it is primarily used for non-blending purposes. The fuel additive which is used in the Ethanol Blending Program (EBP) is the one which is domestically produced either by the sugar mills or the standalone ethanol plants. Of the 334 crore litres of non EBP fuel ethanol used annually, 100 crore litres is imported, most of it coming from the USA.
Millers in the state said if duty import is allowed, the landed cost of the fuel additive would be around Rs 40-45/litre. This is much cheaper than the Rs 57.97 for ethanol derived from C heavy molasses. Prices for ethanol from other feedstock is higher and has a graded structure. Originally, the EBP was launched to help sugar mills have multiple sources of income and reduce the overproduction of sugar.
While clarification about possible imports is yet to come from government sources, millers say any import will be detrimental for the industry. “Mills have invested heavily in erecting distillers and their turn around is yet to happen. Already last year ethanol production was severely curtailed which has caused losses to us,” said a miller from Marathwada.
Another cause of concern for the industry is the slow but steady push towards non-sugar feed stock. In January this year, the central government launched a special scheme for cooperative mills to opt for the construction of multi-feed ethanol plants, which would use maize, broken rice, etc., as feed stock.
“Any such diversion would cost around Rs 40-45 crore and would again add to the already existing debts of the mills,” A miller said. Of the 920 crore litres to be supplied to oil marketing companies from February-July 2025, 593 crore litres would be from food grains while 196 crores would be from sugarcane juice. Of the remainder, 132 crore litres would be from B heavy molasses and the rest from C molasses.
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Source : The Indian Express
