The difference in rates of grain-based and sugarcane-based ethanol production will hit sugar firms, a top functionary of the sugar cooperatives' sector said on Monday.
The blending of ethanol in petroleum products is the same so why should rates be different, questioned National Federation of Cooperative Sugar Factories Limited director Jaiprakash Dandegaonkar while speaking to PTI.
"Recently, the Maharashtra government allowed the use of food grains such as maize and rice for ethanol production through the dual feed method to be used for blending with petrol. This step will bring sugar mills' investment in trouble, especially when ethanol production had started giving some extra income to them," he claimed.
"The decision to produce ethanol out of food grains will bring the investing sugar factories into trouble because there is a rate difference in the grain based and sugarcane based ethanol production. Grain based ethanol purchase rate is around ₹72, while it is between ₹61-65 for sugarcane based ethanol. The rate of sugar based ethanol is between ₹55 to 65 rupees based on the material used," he pointed out.
If the government wants to improve the condition of sugar mills and farmers then they should keep the rates equal, Dandegaonkar asserted.
"If every sugar mill starts this project, then there is a fear that food grain rates can go higher. If we see the figures of last year, only 32% of ethanol purchased by oil companies is derived from sugarcane and molasses. All the remaining purchase is grain based," he said.
Sugar factories cannot survive on sugar alone and ethanol was an additional income for them, he said.
"There is need for a long term policy on this issue. Depending on the country's needs, sugar production should be restricted and the rest of the cane juice and molasses should be allowed for diversion towards ethanol production," Dandegaonkar said.
