Sugar sector welcomes support for ethanol production

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05 February 2022New Delhi: The government’s decision to impose an additional differential Excise Duty of ₹2 a litre on unblended fuel from October 1 will boost the Ethanol Blending Programme, according to the Indian Sugar Mills’ Association (ISMA). 

According to a notification of the Department of Revenue dated February 1, fuel to be categorised as blended (with ethanol/ methanol) has to conform to BIS specifications. The actual off-take from oil manufacturing companies (OMCs) will improve to achieve the blended fuel percentage, which is currently at about 10 % and avoid the additional Excise Duty, the Association said in a press release. 

In a move to support the Ethanol Blending Programme, the government has kept a provision of ₹ 160 crore in the revised estimate for 2021-2022 and another ₹.300 crore in the budget estimate for 2022-23 for extending financial assistance to sugar mills for augmentation of ethanol production capacity. This will boost setting up of more ethanol distilleries in the country.

The ISMA said in the press statement that oil marketing companies (OMCs) have issued the fourth cycle of EOI indicating a requirement of about 95 crore litres of ethanol for procurement during ethanol season year 2021-22. This indicates that the quantity has been calculated considering 11% blending. 

The revised estimated for 2021-22 financial year has also increased the budgetary allocation for the sugar industry by about ₹ 2,507 crore compared to the original budget estimate (up from about ₹ 4,337 crore to ₹ 6,844 crore), primarily to settle claims of sugar mills under schemes for assistance to sugar mills for 2019-2020 and export assistance for 2020-21 sugar season. This is a positive decision as almost all these payments are to be made to the sugarcane farmers.

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