The Crossbill News Desk
The Union government has barred sugar mills and distilleries from using sugarcane juice, syrup and B-heavy molasses to produce ethanol during the 2026-27 supply year, citing a decision to prevent sugar from being diverted for fuel production amid concerns over domestic availability.
The Union Food Ministry communicated the restriction to sugar mills on Thursday (October 22), shortly after oil marketing companies announced that they would not procure ethanol manufactured from these sugar-based feedstocks, The Hindu Business Line reported.
“Accordingly, Sugar Mills/Distilleries are not allowed to produce ethanol from sugarcane juice and B-heavy molasses in the ensuing ESY 2026-27,” the Ministry said in its letter, referring to the ethanol supply year running from November 2026 to October 2027.
The Ministry also issued a separate communication to excise department officials in sugar-producing states, directing them to ensure that the restriction is implemented across their jurisdictions.
“As per the decision of the Government of India, diversion of sugar for ethanol production shall not be permitted during the ensuing Ethanol Supply Year (ESY) 2026-27,” the second letter stated.
The state authorities have been asked to issue instructions to all relevant agencies and monitor compliance with the government’s decision. The Ministry stressed that the ban must be strictly enforced throughout the upcoming supply year.
“The State Excise Department may also take necessary measures to monitor compliance and ensure that no ethanol is produced from sugarcane juice and B-heavy molasses during ESY 2026-27,” the Ministry said, according to The Hindu Business Line.
The move comes amid concerns over the country’s sugar availability following the expansion of ethanol production. India experienced a sugar shortage during the 2025-26 sugar season, which runs from October to September, and similar pressures are anticipated in the 2026-27 season.
The restriction also comes against the backdrop of mounting criticism of the Union government’s E20 policy, which mandates petrol containing up to 20% ethanol. The policy has faced public opposition, with online campaigns, Right to Information applications and petitions before the Supreme Court seeking greater transparency and the continued availability of petrol without ethanol.
Complaints of unusual wear and tear affecting engines, fuel tanks, carburettors and fuel lines have also surfaced following the policy’s rollout five years ahead of schedule.
Critics have argued that the accelerated implementation did not give vehicle manufacturers sufficient time to optimise engines for E20 fuel, leaving owners of vehicles designed for E10 or lower ethanol blends concerned about potential damage.
The latest restriction on sugar-based ethanol production highlights the competing demands of the government’s fuel-blending programme and the need to safeguard domestic sugar supplies, even as questions continue over the implementation and impact of the E20 policy.
The Union Food Ministry communicated the restriction to sugar mills on Thursday (October 22), shortly after oil marketing companies announced that they would not procure ethanol manufactured from these sugar-based feedstocks, The Hindu Business Line reported.
“Accordingly, Sugar Mills/Distilleries are not allowed to produce ethanol from sugarcane juice and B-heavy molasses in the ensuing ESY 2026-27,” the Ministry said in its letter, referring to the ethanol supply year running from November 2026 to October 2027.
The Ministry also issued a separate communication to excise department officials in sugar-producing states, directing them to ensure that the restriction is implemented across their jurisdictions.
“As per the decision of the Government of India, diversion of sugar for ethanol production shall not be permitted during the ensuing Ethanol Supply Year (ESY) 2026-27,” the second letter stated.
The state authorities have been asked to issue instructions to all relevant agencies and monitor compliance with the government’s decision. The Ministry stressed that the ban must be strictly enforced throughout the upcoming supply year.
“The State Excise Department may also take necessary measures to monitor compliance and ensure that no ethanol is produced from sugarcane juice and B-heavy molasses during ESY 2026-27,” the Ministry said, according to The Hindu Business Line.
The move comes amid concerns over the country’s sugar availability following the expansion of ethanol production. India experienced a sugar shortage during the 2025-26 sugar season, which runs from October to September, and similar pressures are anticipated in the 2026-27 season.
The restriction also comes against the backdrop of mounting criticism of the Union government’s E20 policy, which mandates petrol containing up to 20% ethanol. The policy has faced public opposition, with online campaigns, Right to Information applications and petitions before the Supreme Court seeking greater transparency and the continued availability of petrol without ethanol.
Complaints of unusual wear and tear affecting engines, fuel tanks, carburettors and fuel lines have also surfaced following the policy’s rollout five years ahead of schedule.
Critics have argued that the accelerated implementation did not give vehicle manufacturers sufficient time to optimise engines for E20 fuel, leaving owners of vehicles designed for E10 or lower ethanol blends concerned about potential damage.
The latest restriction on sugar-based ethanol production highlights the competing demands of the government’s fuel-blending programme and the need to safeguard domestic sugar supplies, even as questions continue over the implementation and impact of the E20 policy.
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