India Removes All Limits on Ethanol Production from Sugarcane

The Indian government has taken a big step to support the ethanol industry . Starting November 1, 2025, sugar mills and distilleries can make ethanol from sugarcane juice, sugar syrup, and both B-heavy and C-heavy molasses without any limits for the entire Ethanol Supply Year 2025–26.

Earlier, in 2024–25, the government had put restrictions because there wasn’t enough

sugarcane available. But now, thanks to good rainfall and better sugarcane production, the government has lifted those restrictions.

Why Ethanol from Sugarcane Decision is Important

1. Supports India’s E20 GoalIndia wants to mix 20% ethanol with petrol (called E20 fuel) by 2025–26. This will reduce pollution and lower the country’s fuel import bills.

2. Helps Farmers and Sugar Mills

   • Farmers will get faster payments from mills by this etanol from sugarcane project.

   • Sugar mills will earn more profits by making ethanol along with sugar.

3. Boost for the Stock MarketAfter this announcement, shares of sugar companies went up sharply—some rose by 20% in a single day.

4. Cleaner Fuel for ConsumersMore ethanol in petrol means cleaner energy and less reliance on imported crude oil.

Government Oversight

• The Department of Food & Public Distribution (DFPD) and the Petroleum Ministry will keep track of how much sugar is being diverted for ethanol, to make sure there is enough sugar left for the people.

• In the previous year (2024–25), India allowed about 4 million tonnes of sugar to be used for ethanol.

Benefits for Different Groups

Group	Benefits
Farmers	More income, quicker payments
Sugar Mills	Higher profits, no production cap
Consumers	Cleaner fuel, lower import bills
Investors	Rising sugar stock values

What to Expect Next

• Price Changes: Mills are asking the government to increase the price at which ethanol is purchased, so both farmers and companies benefit more.

• Crop Shifts: Farmers may grow more sugarcane and maize because of higher demand for ethanol.

• Vehicle Concerns: New vehicles support E20 fuel, but older cars and bikes may face some issues. The Supreme Court has already dismissed a case asking for ethanol-free petrol, so E20 rollout will continue.

Final Takeaway

This move is a win-win:

• Farmers earn more,

• Sugar mills get higher profits,

• Consumers get cleaner fuel,

• India moves closer to energy independence.

It’s also a strong push for India’s vision of becoming greener and less dependent on imported oil.