Equity capital is the biggest hurdle for setting up ethanol projects, with ‘so many’ factories in the state
Kolhapur: It is a picture that raising capital is the biggest problem for sugar mills in the state to set up ethanol projects. Currently, 122 out of 200 factories produce ethanol in the state. Maharashtra’s capacity to supply 226 crore liters of ethanol has been increased by the state to 244 crores.
Union Cooperation Minister Amit Shah at a program held in Pune on Sunday
insisted that all sugar mills in the state should switch to ethanol products.
While it is true that ethanol provides a major economic base for manufacturing, there are also difficulties in converting all factories to ethanol products. Most of the factories that have not started these projects are of negative net worth. Even if they are asked to start the project with the help of the government, 10 percent amount is required for own capital: From where to bring it is a crack. Although the cost of the project increases depending on the capacity, at least one hundred crores of investment has to be made for this project.
The project cannot be run for 300 days from the amount of molasses that is available after the mill is exhausted. An ethanol plant of such low capacity would not be economically viable. Another important factor is that there may be shortage of molasses when all factories start producing ethanol. Ethanol production from other grains is an alternative for that. Such products can be made from rice and maize.
But the central government’s policy in grain supply is very poor. Its decisions are made on the shortage of food grains in the country. So the question is from what to produce ethanol if alternative grains are not available. The central government has recently imposed restrictions on ethanol production from rice. Then, as a solution to that, the country needs to produce as much sugar as Brazil and prefer to make ethanol using B heavy molasses. Now 10 percent ethanol blend is allowed in petrol. The central government is trying to increase this ratio to 20 percent by 2025.
Ethanol Production
Plants in Maharashtra -Number
Capacity (Cr. Litres)
Co-operative – 42: 64.90
Private – 42: 99.11
Independent Projects – 38: 61.85
Total 122 Projects : 226
Three Year Demand-Supply (in Crore Litres)
Year: Demand: Supply : Percentage
2020-21: 108: 97: 89.81
2021-22:120: 102: 85.00
2022-23:132:87.11: 65.90 (end of June)
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