Sugar sector welcomes support for ethanol production

The government’s decision to impose an additional differential excise duty of ₹2 per liter on unblended fuel from October 1 will boost the ethanol blending scheme, according to the Indian Sugar Mills’ Association (ISMA).

According to a Ministry of Revenue notification dated February 1, fuel to be classified as blended (with ethanol/methanol) must meet BIS specifications. The actual Petroleum Manufacturing Enterprises (OMC) levy will improve to achieve the blended fuel percentage, which is currently around 10%, and avoid the additional excise duty, the Association said in a press release. .

In a bid to support the ethanol blending scheme, the government has kept a provision of ₹160 crore in the revised estimate for 2021-2022 and another ₹300 crore in the budget estimate for 2022-23 for the extension of financial aid to sugar refineries for increasing ethanol production capacity. This will stimulate the creation of more ethanol distilleries in the country.

ISMA said in the press release that the Petroleum Marketing Companies (OMC) released the fourth round of EOI indicating a need of around 95 crore liters of ethanol for supply during the season. ethanol 2021-22. This indicates that the quantity was calculated assuming an 11% mix.

The revised estimate for FY 2021-22 also increased the budget allocation for the sugar industry by around ₹2,507 crore from the original budget estimate (from around ₹4,337 crore to ₹6,844 ₹ crores), mainly to settle claims of sweets. under the aid schemes for sugar refineries for 2019-2020 and export aid for the sugar campaign 2020-21. This is a positive decision because almost all of these payments are to be made to cane growers.

Rachel J. Bradford