The Government of India has introduced a scheme to support Cooperative Sugar Mills (CSMs) by providing financial assistance to convert existing sugarcane-based ethanol plants into multi-feedstock-based units. This initiative, aligned with the Ethanol Blended Petrol (EBP) Programme, aims to enhance ethanol production efficiency and ensure year-round operations.
Key Highlights of the Scheme
- The scheme will facilitate the conversion of ethanol plants to allow the use of alternative feedstocks such as maize and damaged food grains (DFG).
- The government will provide an interest subvention of 6% per annum or 50% of the interest rate charged by banks or financial institutions, whichever is lower.
- The subvention will be applicable for a period of five years, including a one-year moratorium.
Objective of the Scheme
The sugarcane crushing season is typically limited to four to five months in a year, restricting the operational period of sugar mills. This impacts their financial viability and efficiency. By enabling plants to operate on multiple feedstocks, sugar mills can:
- Maintain operations throughout the year.
- Increase financial sustainability.
- Contribute to the government’s target of 20% ethanol blending with petrol by 2025.
Government’s Ethanol Blending Programme
The Ethanol Blended Petrol (EBP) Programme is a nationwide initiative aimed at reducing India’s dependence on fossil fuels and lowering emissions. Since its inception in 2018, the programme has introduced various interest subvention schemes to support ethanol production.
The latest modification under this scheme will ensure a sustainable ethanol supply chain while bolstering the sugar industry’s financial health. This policy move is expected to significantly contribute to India’s renewable energy goals and agricultural sustainability.
