Ethanol: Centre sets sugar diversion at zero for ESY 2026-27
Why in the news
The Centre has directed oil marketing companies (OMCs) to keep sugar diversion for ethanol at zero in the 2026-27 ethanol supply year (ESY), which begins in November, so that more cane goes into sugar.
Key facts
- Barred feedstocks: sugarcane juice, sugar syrup and B-heavy molasses.
- Allowed feedstocks: maize, broken rice, damaged foodgrains, surplus FCI rice and C-heavy molasses.
- OMC tender: bids invited for 11 billion litres of ethanol for 2026-27.
- Reasons: record-high retail sugar prices, deficient monsoon rain in Maharashtra and Karnataka that hurt cane yields, and the need for buffer stocks before the festive season.
- Demand: last season’s net sugar output barely covered domestic needs of 280-285 lakh tonnes.
| Status | Feedstock |
|---|---|
| Not allowed | Cane juice, sugar syrup, B-heavy molasses |
| Allowed | Maize, broken rice, damaged foodgrains, surplus FCI rice, C-heavy molasses |
About ethanol blending
India has achieved 20% ethanol blending in petrol (E20) across the country, earlier than the original 2030 deadline. National ethanol production capacity is close to 2,000 crore litres. The government plans to study higher blends such as E25 and E27, and flex-fuel options up to E85, with carmakers. The ethanol industry has sought better prices for maize- and rice-based ethanol, citing viability worries.
Exam angle
- The ethanol supply year begins in November.
- Know the difference: B-heavy molasses is barred, C-heavy molasses is allowed.
- E20 means 20% ethanol mixed in petrol.