Ethanol production
In news
Centre raised the prices of Ethanol produced from C-heavy grade molasses
Fixed the prices for ethanol produced from B-heavy molasses and sugarcane juice
C & B not remunerative in absence of stable policy regime
Restrictions on Ethanol from sugarcane lifted. Additional investment & no clear policy holding its production
Basics
Molasses is a viscous product resulting from refining sugarcane or sugar beets into sugar.
Cane based ethanol can be produced from sugarcane juice, B & C grade molasses
Why Ethanol from sugarcane now?
India has glut in sugar production.Diverting some part towards ethanol would bring down the effects from surplus production
From B molasses
Not much investment needed, as B molass is intermediary with C molass
From sugarcane
Requires setting up of a distillery
Pricing PART
1 tonne of sugar diverted = 600l of ethanol
B molas has sugar left in them. To compensate they should be priced 1.5times more
Comparision: Brazil
In brazil: vehicles run on 100% ethanol-->Blending mandate 27%
Ethanol from sugarcane is common practise across the globe
Brazil: the largest sugar producer, hence most ethanol from same
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Surplus sugar production now: hence time right to divert for better use
Way forward
Sugar industry under difficult phase now, have to wait for how these investments return
Govt revision of prices must to make it remunerative for producers