Sugar mills can submit ethanol proposals in new window till Oct 15: Govt

The Centre has opened a one-month window for sugar mills till October 15, for submitting their proposals to avail loans at a subsidised interest rate for augmenting ethanol capacity in the country, a senior Food Ministry official said on Tuesday.

The Centre has opened a one-month window for sugar mills till October 15, for submitting their proposals to avail loans at a subsidized interest rate for augmenting ethanol capacity in the country, a senior Food Ministry official said on Tuesday. As part of an incentive scheme announced in June 2018, the Centre had approved soft loans for mills to set up new distilleries or upgrade existing ones, expand capacity, and encourage them to divert sugarcane to ethanol making.

Under the scheme, the government has extended twice the interest subvention that comes up to Rs 4,600 crore for a loan amount of Rs 22,000 crore. "So far, 68 proposals worth Rs 3,500 crore have been approved and banks have sanctioned the loan. A new window has been opened now for fresh proposals," the official told PTI.

The window was opened from September 15 for a month. Those mills whose applications were rejected earlier for non-fulfillment of certain conditions, as well as newly set up mills, can apply for the soft loans, he said. An additional ethanol capacity of 190 crore liters is estimated to be created from the 68 proposals. There is scope for approving more proposals, he added.

The government is encouraging sugar mills to divert sugarcane to ethanol making to reduce excess sugar availability in the country. Mills have been advised to produce ethanol from B-heavy molasses which has higher sugar content. The diversion to ethanol making will also ensure better returns to mills because ethanol prices fixed by the government are more remunerative than sugar currently.

The government is aiming ethanol production of over 360 crore liters as it intends to achieve ethanol blending with petrol of 10 percent by 2022 and 20 percent by 2030 under the National Biofuel Policy.

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