About a dozen cooperative sugar mills operating molasses-based distilleries have applied to convert their ethanol plants to be run on more widely available grains.
Molasses is produced during the process of making sugar from sugarcane. But the sugarcane crushing period is limited to 4-5 months in a year, which means sugar mills dependent on molasses can only operate for a limited period.
Switching to grains like maize and damaged food grains would ensure year-round ethanol production and improved efficiency for cooperative sugar mills, whose output has been reduced to about a third of India’s overall sugar production.
Out of India’s 269 cooperative sugar mills, 93 operate molasses-based distilleries. “Out of these 93 distilleries… 10 of them applied for conversion of existing sugarcane-based (molasses) feedstock ethanol plants to multi-feedstock-based plants,” said Prakash Naiknavare, managing director, National Federation of Cooperative Sugar Factories Ltd.
Of these 10, eight are in Maharashtra, which is among India’s largest sugarcane growing states, and one each in Gujarat and Karnataka.
The federation is working on modalities so more cooperative sugar mills convert their distilleries from molasses to multi-feedstock.
“We have applied to convert our existing molasses distillery into multi-feedstock to increase our efficiency,” said R.B. Khandagave, managing director, Karnataka-based Chidanand Basaprabhu Kore Sahakari Sakkare Karkhane. “Currently, our distillery is operational for around 200 days, but once the multi-feedstock is in place it would be operational throughout the year.”
The ethanol agenda
Currently, private and cooperative sugar mills in India produce about 3.5 billion litres of ethanol annually. Of this, cooperative sugar mills account for about 1 billion litres.
In terms of sugar production, cooperative sugar mills account for about 35% of the national output, which is estimated at 26.1 million tonnes in 2024-25.
According to a senior official in the government’s co-operation department, the conversion to multi-feedstock plants will increase the financial viability and ensure better cash flows for cooperative sugar mills.
In March, the Union government notified a scheme offering interest subvention, or a lower borrowing rate, for cooperative sugar mills converting ethanol distilleries to multi-feedstock units.
Under the modified Ethanol Interest Subvention Scheme, the government offers an interest subvention of 6% per annum or 50% of the rate of interest charged by financial institutions, whichever is lower.
The interest subvention is provided for a period of five years by the government, including a one-year moratorium on loan repayment.
Cooperative sugar mills availing the benefit of interest subvention will also be given Priority-1 status by oil market companies. This aligns with the government’s Ethanol Blended Petrol Programme, which mandates 20% ethanol blending with petrol.
On 26 February, during the Advantage Assam 2.0 business summit in Guwahati, petroleum minister Hardeep S. Puri said 19.6% ethanol blending has been achieved so far.
“The conversion to multi-feedstock based plants would not only make the existing ethanol plants of the mills capable of operating when sugar-based feedstocks are not available for ethanol production, but will also improve efficiency and productivity of these plants,” said an official associated with cooperative sugar mills.
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