Ethanol boosts Maharashtra’s sugar industry amid renewed E20 debate
Maharashtra’s sugar industry defended India’s E20 programme, saying ethanol has strengthened mill finances, farmer payments and rural livelihoods. The state invested ₹35,000 crore in ethanol infrastructure, expanded capacity significantly, urged higher sugar-based ethanol procurement prices, and dismissed concerns over E20 vehicle compatibility.
PUNE: Maharashtra’s sugar industry has strongly defended the country’s ethanol blending programme amid fresh concerns over the impact of E20 fuel on vehicle performance, saying ethanol has become indispensable to the financial sustainability of sugar mills and the livelihoods of millions dependent on the sugarcane economy.
Industry leaders said ethanol, once viewed as a by-product of sugar manufacturing, has emerged as a key revenue source, helping mills withstand volatile sugar prices, improve cash flows and ensure timely payments to sugarcane farmers, Hindustan Times reported.
Maharashtra has been at the forefront of India’s ethanol expansion, driven by heavy investments from cooperative and private sugar mills after the Centre accelerated the Ethanol Blended Petrol (EBP) programme. According to the state sugar commissionerate, ethanol production capacity rose from 26 lakh litres in 2021-22 to 244 crore litres in 2022-23.
The state has nearly 210 sugar mills, including 106 cooperative mills, with around 150 producing ethanol. Their combined installed capacity is close to 400 crore litres, making Maharashtra one of the country’s largest ethanol-producing states.
According to the National Federation of Cooperative Sugar Factories Ltd (NFCSF), the state’s sugar sector has invested more than ₹35,000 crore in distilleries and ethanol infrastructure over the past four to five years. Modern ethanol plants typically require investments ranging from ₹150 crore to ₹500 crore.
State Sugar Commissioner Sanjay Kolte said increasing ethanol production has significantly improved the financial viability of sugar factories.
Production has continued to grow steadily. Maharashtra produced 81.37 crore litres of ethanol during the 2023-24 Ethanol Supply Year, which increased to 104.83 crore litres in 2024-25. Around 64 crore litres have already been produced in the ongoing supply year.
Union Road Transport and Highways Minister Nitin Gadkari has repeatedly described ethanol as critical to the future of both farmers and the sugar industry. He has said many sugar mills, particularly in western Maharashtra, would have struggled to survive without the additional revenue generated from ethanol.
NFCSF President Harshwardhan Patil said the ethanol blending programme helped India save nearly ₹45,000 crore in foreign exchange last year by reducing crude oil imports while creating a stable market for sugarcane, maize and rice used in ethanol production.
Industry representatives also dismissed concerns over E20 fuel. Former Maharashtra minister and chairman of Samarth Cooperative Sugar Factory Rajesh Tope said there was misinformation surrounding ethanol-blended petrol, adding that vehicles compatible with higher ethanol blends are already available and that maintaining fuel quality is essential.
Maharashtra State Cooperative Sugar Factories Federation vice-chairman Pratap Ohol said ethanol revenue has enabled mills to pay Fair and Remunerative Price (FRP) dues to sugarcane farmers and wages to workers on time, improving the financial health of factories that support thousands of rural families.
However, the industry has urged the Centre to revise procurement prices for sugar-based ethanol. NFCSF Managing Director Prakash Naiknavare said procurement prices for B-heavy molasses and sugarcane juice-based ethanol have remained unchanged for four years despite a nearly 20% increase in the Fair and Remunerative Price (FRP) for sugarcane.
The industry has also called for a higher share of sugar-based ethanol in government procurement, saying Maharashtra has adequate production capacity to meet increased demand and continue contributing to India’s clean energy transition.
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Source : ChiniMandi
