India lifts ethanol production limits for 2025/26 to boost sugar sector

The Government of India has announced the removal of all quantitative restrictions on ethanol production from sugarcane juice, syrup, and all types of molasses for the 2025/26 ethanol supply year, starting November 1.
The decision marks a significant policy shift aimed at supporting sugar mills, boosting renewable energy production, and advancing India’s biofuel blending targets.
Previously, ethanol production was capped due to reduced sugarcane availability in the current marketing year. However, improved rainfall over the past two monsoon seasons has expanded sugarcane cultivation, leading to expectations of higher supplies in the upcoming season.
“This is a welcome move. The government should also consider raising the ethanol procurement price so that mills can pay farmers the government-fixed cane price,” said a sugar mill operator from Maharashtra, India’s leading sugar-producing state.
The Ministry of Consumer Affairs, Food & Public Distribution stated that while production will now be unrestricted, sugar diversion to ethanol will be periodically reviewed to ensure sufficient year-round domestic sugar availability.
Several leading sugar producers, including E.I.D. Parry, Balrampur Chini Mills, Shree Renuka Sugars, Bajaj Hindusthan and Dwarikesh Sugar, have expanded their ethanol production capacity in recent years to capitalize on the growing demand.
As the world’s second-largest sugar producer and third-largest importer and consumer of petroleum products, India aims to blend 20% ethanol into gasoline by 2025/26, reducing its reliance on crude oil and supporting cleaner energy initiatives.