Scheme for Conversion of Ethanol Plants in Cooperative Sugar Mills

The Government of India has announced a scheme to help Cooperative Sugar Mills (CSMs) to convert their existing sugarcane-based ethanol plants into multi-feedstock units. 

• This initiative aims to improve financial viability, operational efficiency, and ethanol production capacity.

About the Scheme

• It has been notified under modified Ethanol Interest Subvention Scheme for Conversion of existing sugarcane-based feedstock ethanol plants into multi-feedstock based plants to use grains like Maize and Damaged Food Grains (DFG).
• Ministry: Department of Food & Public Distribution, Ministry of Consumer Affairs.

Key Features of the Scheme

• Interest Subvention: The government will provide interest subvention at 6% per annum or 50% of the interest rate charged by banks, whichever is lower, for five years (including a one-year moratorium).
• Multi-Feedstock Conversion: Sugar mills can utilize maize and damaged food grains to produce ethanol when sugarcane is not available.
• Continuous Operation: Since sugarcane crushing is limited to 4-5 months per year, this conversion ensures year-round ethanol production, enhancing operational efficiency.
• Financial Viability: Increased production and diversification of feedstock will lead to better cash flows and sustainability of cooperative sugar mills.

Significance: Alignment with the Ethanol Blended Petrol (EBP) Programme

• Supports the Government’s target of 20% ethanol blending with petrol by 2025.
• Enhances domestic ethanol production, reducing dependence on imported fuels.
• Encourages the use of alternative feedstocks, optimizing resource utilization.

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