WISMA urges launching of pilot projects for E25 and E30 in states with surplus ethanol capacity
The West Indian Sugar Mills Association (WISMA) warned of severe underutilization of India’s 1,700+ crore litre ethanol capacity, risking financial stress for mills and farmers. It urged PM Modi to permit RS/ENA production, allow ethanol exports, extend subsidies, launch E25–E30 pilots, explore marine fuels, promote isobutanol, and expand flex-fuel adoption.
The West Indian Sugar Mills Association (WISMA) apprised the government that there is a need for a complete and practical plan to use the available excess ethanol capacity and the excess ethanol being produced. At the same time, the plan should help minimize dependence on crude oil imports.
In a letter to Prime Minister Narendra Modi, WISMA mentioned that India is facing a big challenge, the nation’s installed capacity has reached approximately 1,700 plus crore litres annually, and ongoing expansions will soon push this figure close to 2,000 crore litres per annum. Against this, OMC’s current allocation for ESY 2025-26 is approximately 1,048 crore litres, leaving about 600+ crore litres of excess capacity unutilized (utilization rate of approximately 62%). Underutilization has already begun to create acute financial pressures for sugar mills and distilleries, resulting in delayed payments to farmers, stranded investments of over 18,000 crores, weakening rural incomes, and the possibility of increased NPAs in the banking sector. Without an alternative demand mechanism, the country risks over 5 crore sugarcanedependent families at risk.
WISMA proposed a comprehensive set of immediate and medium-term measures that complement the core two-track strategy in order to address the challenges.
The sugar body requested PM Modi that existing dedicated 1G ethanol plants be permitted to manufacture Rectified Spirit (RS) and Extra Neutral Alcohol (ENA), and that along with the export of sugar, and molasses, ethanol in all forms including fuel-grade, ENA, and pharmagrade be allowed with incentives from State and Centrals Governments where ever applicable. This could unlock 100-150 crore litres of ethanol for global markets and provide immediate relief to the manufacturers.
WISMA urged that current financial schemes for distilleries, such as the interest subvention scheme, be extended for an additional two years. This will help distribute financial burdens and support the viability of ongoing operations and investments.
“We propose that government should instruct launching of pilot projects for E25 and E30 in respective states with surplus ethanol capacity such as Uttar Pradesh, Karnatka Maharashtra, Madhya Pradesh, and Bihar. These pilots would validate consumer benefits and absorb an additional 50-70 crore litres of ethanol in the short term,” WISMA said in its communication to the Prime Minister.
WISMA has also recommended initiating trials for 20% ethanol in marine fuels. These emerging applications could conservatively absorb 40-50 crore litres of ethanol and lay the groundwork for broader adoption in shipping sectors.
It highlighted that the diesel segment is India’s most important and strategic area to increase the use of biofuels. Diesel makes up almost 70% of our transport fuel, running essential areas like freight, farming, public buses, mining, and factories. India uses a huge amount of about 92 MMT of diesel every year.
WISMA noted that since ethanol cannot be mixed with diesel directly as ethanol in gasoline due to phase separation, existing as is ethanol cannot be used for diesel blending. Global research and studies conducted by CSIR-IIP demonstrate that isobutanol (IBA) is a far better option because it mixes perfectly with diesel without phase separation, exhibits a higher cetane number than ethanol, offers substantially higher energy density, handles water better, and displays improved cold-weather performance.
The association emphasised that IBA can be made from the same sugarcane feed stocks: sugarcane juice, molasses, and B-heavy molasses. We don’t need to build new factories; we can simply and affordably upgrade our existing ethanol plants to make isobutanol far more economically than building new green field facilities.
WISMA also recommended granting flex-fuel vehicles tax and policy benefits on par with electric vehicles. GST anomaly of E20 and E85 blended petrol to be addressed which will reduce E85 price to consumer considerably. It also proposed fast-tracking the development and testing of E85 retrofit
kits for existing two-wheelers, with directives issued to ARAI, ICAT, and GARC. This initiative alone could consume 250-300 crore litres of ethanol while offering a costeffective decarbonization pathway for India’s vast two-wheeler fleet.
The association requested that the Ministry of Petroleum and Natural Gas (MoPNG) instruct ARAI to conduct time-bound trials for E27 and E30 blends, with a six-month completion target. These trials would enable the next phase of petrol blending and absorb an estimated 200-250 crore litres of ethanol. A clear national roadmap for Sustainable Aviation Fuel (SAF) should also be established, including ethanol-to-jet pathways, blending mandates of 20-30% ecosystem development, and validation of carbon intensity (CI) numbers for various feeds stocks. With proactive steps, SAF production could begin by FY 2029 and absorb 400-600 crore litres of ethanol annually.
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Source : Chinimandi
