A meeting co-chaired by Secretary (Food & Public Distribution), Secretary (MoPNG) and Secretary (DFS) was held with the representatives of leading banks and Oil Marketing Companies, Cane Commissioners of major sugar producing States and sugar industry associations on August 21, 2020.
It was agreed that as producers of ethanol (sugar mills), buyers of ethanol (OMCs) and the lenders (banks) are willing to enter into a tri-partite agreement (TPA) about producing, buying and paying for the ethanol through an escrow account etc., the banks can consider giving loans to sugar mills even with weak balance sheets.
- Ethanol is a green fuel & its blending with petrol also saves the country’s foreign exchange.
- The Government has 10% blending target for mixing ethanol with petrol by 2022 & 20% blending target by 2030.
- During last ethanol supply year 2018-19 about 189 crore ltrs of ethanol was supplied by sugar mills and grain based distilleries to OMCs thereby achieving 5% blending target and in current ethanol supply year 2019-20.
- With a view to achieving blending targets, Government is encouraging sugar mills and molasses based standalone distilleries to enhance their ethanol distillation capacity.
- To encourage sugar mills to divert excess sugarcane to produce ethanol for blending with petrol, the Government has allowed production of ethanol from B-Heavy Molasses, sugarcane juice, sugar syrup and sugar; and has also fixed the remunerative ex-mill price of ethanol derived from these feed-stocks.
