ISMA Backs India’s Ethanol Policy Shift to Safeguard Domestic Sugar Supply
State-run oil marketing companies have barred ethanol made from sugarcane juice, sugar syrup and B-heavy molasses from their latest procurement tender for the 2026-27 supply year for blending in petrol, as the government seeks to protect domestic sugar supplies while sustaining its nationwide petrol-blending programme.
State-run oil marketing companies have barred ethanol made from sugarcane juice, sugar syrup and B-heavy molasses from their latest procurement tender for the 2026-27 supply year for blending in petrol, as the government seeks to protect domestic sugar supplies while sustaining its nationwide petrol-blending programme.
The tender, issued on October 16 by Bharat Petroleum Corporation Ltd (BPCL) on behalf of oil marketing companies (OMCs), seeks bids for around 11 billion litres of ethanol for the supply year beginning November to meet the requirement of doping 20 per cent ethanol in petrol.
In a statement, the Indian Sugar & Bio-Energy Manufacturers’ Association (ISMA) welcomed the government’s “calibrated approach” towards balancing domestic sugar availability and ethanol supply.
However, the ISMA said the preferential allocation given to dedicated ethanol plants under the current tender should not be carried into future years.
Under the ESY 2026-27 procurement tender, ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses has been excluded, while C-heavy molasses-based ethanol remains eligible.
ISMA said the C-heavy molasses offers mills a way to continue contributing to ethanol production without diverting recoverable sugar.
ISMA, however, raised concern over the “preferential allocation” granted to dedicated ethanol plants holding long-term offtake agreements under the ESY 2026-27 tender.
While the provision is already in place for 2026-27, its continuation in subsequent years could seriously hurt the sugar industry.
The ISMA has urged the government to revisit the preferential allocation framework for subsequent ethanol supply years so that sugar mills are not disadvantaged.
In the past few months, the Centre has taken various measures to boost domestic supply and control rising prices.
