The Government has issued a fresh order reversing ban on the use of sugarcane juice for making ethanol and allowed utilisation of the juice as well as B-heavy molasses to produce green fuel in the 2023-24 supply year.

Food Ministry in a directive issued to all sugar mills and distilleries, said the oil marketing companies (OMCs) will issue a revised allocation of sugarcane juice and B-heavy molasses-based ethanol for the 2023-24 supply year to each distillery.

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OMCs have been asked to inform the food ministry after placement of revised contracts. After receiving the revised allocation, sugar mills and distilleries have been asked to supply ethanol strictly as per the revised quantity of cane juice and B-heavy molasses.

The order comes days after the Centre on December 7 banned use of sugarcane juice and sugar syrup for the 2023-24 supply year in an order to ensure adequate sugar supply in the domestic market and check prices.

“No diversion of sugarcane juice and B heavy molasses is allowed for production of rectified spirit and extra neutral alcohol. All molasses-based distilleries will endeavour to make ethanol from C-heavy molasses,” the directive said.

Food Secretary Sanjeev Chopra said the decision was taken in the meeting of a Committee of Ministers.

The government has decided to give flexibility to use both cane juice and B-heavy molasses within a overall cap on diversion of sugar of up to 17 lakh tonnes in the current 2023-24 supply year.

It has estimated sugar production to decline to 32.3-33 million tonne in the 2023-24 season (October-September) as against 37.3 million tonnes in the previous season.

On December 7, the government banned use of sugarcane juice and sugar syrup, however it allowed use of ‘B-molasses’ for ethanol production in 2023-24, a move which sugar industry bodies welcomed.

The Managing Director of National Federation of Cooperative Sugar Factories (NFCSF), Pakash P Naiknavare, had said, “There is huge stock of ethanol made from B-molasses lying in the country apart from contracted quantities. The letter resolves the industry’s concern.”