Govt policy soon on 100% biofuel vehicles to boost ethanol consumption: Gadkari

Asks over 350-odd sugar mills to quickly set up ethanol manufacturing units

Transport Minister Nitin Gadkari on Wednesday said the Centre would announce a policy to allow manufacturing of flexible fuel vehicles next month, which would help in cutting down pollution and also increase ethanol consumption.

Addressing the 81st annual general meeting of the Indian Sugar Mills Association (ISMA), Gadkari said the over 350-odd sugar mills in the country, which do not have an ethanol manufacturing facility, should quickly shift to the same, as the sugar industry would not survive in the next few years unless it used a major part of the sugarcane juice for making ethanol and not sugar.

“With Brazil continuing to make surplus sugar, there is very little chance of any sharp uptick in global sugar prices in the near future,” Gadkari said.

The minister said he has asked Germany's biggest car maker, Volkswagen, to make flexi-fuel vehicles for India. “Efforts should be made to cut sugar production and concentrate wholly on ethanol production,” said the minister.

He regretted that the petroleum industry is not very keen to promote bio-fuels in the interest of the farmers. ISMA director-general Abinash Verma said, “This is the future... The ethanol producing industry will react once there is demand.” Verma added: “It is not a problem for automakers to make flexi-fuel cars for India. But there has to be a policy, demand and infrastructure to supply 100 per cent ethanol for blending with petrol.”

Last year, the country achieved 2.5 per cent ethanol blending with petrol.

“We supplied 66 crore litres of ethanol last year. This year, we expect to achieve five per cent ethanol blending. We have already contracted for 104 crore litres," he said.  Gadkari also made it clear that there are no immediate solutions the government can offer to the sugar industry despite being fully aware of the problems

ISMA president A Vellayan said the opening stock of sugar in the 2016-17 season that will begin from October 2016 is expected to be around 6.7 million tonnes, which is lower than the opening stock of 9.1 million tonnes of 2015-16.

He said the industry is capable of exporting 1-1.2 million tonnes of white sugar and around two million tonnes of raw sugar in the 2015-16.

In the current season, mills have so far signed deals to export 600,000 tonnes of sugar, including 125,000 tonnes contracted by Indian Sugar Exim Corporation.

Out of this, nearly 300,000 tonnes of sugar has already been dispatched and the remaining would be shipped out in the next two to three months.

India has been pushing domestic mills to sell sugar on the international market and use the proceeds to clear huge debts they owe farmers for sugarcane.

In September, it made it compulsory for sugar producers to ramp up exports to at least four million tonnes in the current crushing season, as the country is set to produce a surplus for a sixth straight year.