Sugar-based ethanol, once central to India’s Ethanol Blended Petrol (EBP) programme, faces a declining role due to raw material constraints, competing sugar demands, and a strategic shift towards grain-based and other ethanol sources. While foundational to the EBP’s launch in 2003, its progress is now limited. This analysis details the current situation and implications for sugar-based ethanol production.
Current limitations: Initially leveraging India’s sugarcane dominance, sugar-based ethanol struggled to meet the 20 per cent blending target (achieved with a 30 per cent sugar-based and 70 per cent grain-based mix). Last year’s sugar shortage, caused by monsoon failures, prioritised domestic sugar consumption, leading to stagnant ethanol prices from sugarcane juice and B-heavy molasses, effectively capping its growth in favour of grain-based alternatives.
The core issue is raw material availability. Sugarcane’s high water consumption (around 2,860 litres of water per litres of ethanol) and limited molasses-based ethanol capacity (875 crore litres of 1,380 crore total in late 2023) make significant scaling unsustainable, requiring vast land and water resources that conflict with food security and water conservation. With annual domestic sugar demand at 28-29 million tonnes and a projected production drop, large-scale diversion of cane to ethanol is unlikely.
