We anticipate favourable policy developments on ethanol pricing, feedstock availability: Tarun Sawhney
Industry leaders anticipate increased sugar diversion for ethanol production in the upcoming Ethanol Supply Year, driven by favorable government policies on ethanol pricing and feedstock availability. Tarun Sawhney from Triveni Engineering & Industries projects that sugarcane sowing will reach 57.68 lakh hectares in 2024, with total sugar production of 34.5 million tonnes. About 4 million tonnes of sugar will be diverted to ethanol production, enhancing revenues for sugar mills. The government aims for 20% ethanol blending by 2025, with current blending at 15.90%. Achieving this requires around 1700 crore liters of production capacity.
Industry leaders are expecting higher sugar diversion for ethanol production in the upcoming Ethanol Supply Year, along with positive policy announcements from the government regarding ethanol pricing and feedstock availability.
Tarun Sawhney, Vice Chairman & Managing Director of Triveni Engineering and Industries, commented on the production outlook, stating, “As per the recent estimates, the sugarcane sowing reached 57.68 lakh hectares in 2024 which is slightly higher than the sowing of last year at 57.05 lakh hectares. It is estimated that the gross sugar production will be 34.5 million tonnes in Sugar Season 2024-25 with around 4 million tonnes will go for ethanol production. This augurs well for the sugar industry as this shift will not only reduce sugar output, it is expected to enhance revenues for integrated sugar mills through healthy domestic prices and increased distillery volumes. With the healthy sugar inventory in the country, the industry hopes that the Government will also permit sugar exports of around 2 million tonnes. This further ensures liquidity at sugar mills boosting timely sugarcane payments to farmers.”
“The cumulative ethanol blending during November 2023 to June 2024 was 13% across India as per the recent Government reports. The sector’s ability to stay profitable and adapt to policy changes will hinge on the successful implementation of the Ethanol Blended Petrol Programme (EBP20) and overcoming challenges related to feedstock and infrastructure. We are confident in the Government’s commitment to achieving the 20% ethanol blending target by 2025-26. We anticipate favourable policy developments on ethanol pricing, feedstock availability etc. which will enable companies to plan their distillery expansions effectively and ensure efficient ethanol production for the 2024-25 Ethanol Supply Year. Overall, the outlook remains stable for the upcoming sugar season, supported by strong domestic prices and Government initiatives”, he further added.
The government is optimistic about India achieving 20% ethanol blending by 2025. According to the Petroleum Planning & Analysis Cell (PPAC) Monthly Ready Reckoner report, ethanol blending with Petrol reached 15.90 per cent in June month.
To achieve the target of 20% blending by 2025, about 1016 crore litres of ethanol are required, and the total requirement of ethanol including for other uses is 1350 crore litres. For this, about 1700 crore liters of ethanol-producing capacity are required to be in place by 2025, considering the plant operates at 80% efficiency. The Government has estimated the demand for ethanol required for 20% blending by 2025, keeping in view the growth of petrol-based vehicles in two-wheeler and passenger vehicle segments and the projected sale of Motor Spirit (MS).
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