Bihar amends sugar Act to boost ethanol output

The Bihar government has decided to allow production of ethanol directly from sugarcane juice instead of the normal Indian practice of processing sugarcane to produce sugar and using the molasses (a byproduct) to produce ethanol.

"We have amended the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981, in March-end and now sugarcane juice can be directly used for producing ethanol or rectified spirit and for cogeneration", said Nitish Mishra, minister of state, cane development.

The amendment also enables government to modify or alter the reserved sugarcane area according to sugar mills' requirement. Further, payment of cane to farmers has been made mandatory via cheques with the latest amendment.

As sugar prices are unstable and the country is likely to face an oversupply situation in sugar in the coming years, investors seem to be shying away from new investments. They are finding it safer to invest in distillery to produce ethanol or alcohol, Mishra added.

Bihar had a flourishing sugar industry some decades ago, but the deteriorating law and order situation saw many companies pulling out of the state. However, Chief Minister Nitish Kumar has been trying to attract sugar companies to the state ever since he came to power.

The state has already bagged investments worth Rs 15,000 crore in ethanol distillery and another Rs 4,500 crore in sugar since the state government announced a new sugar-cum-ethanol policy for the state in early 2006.

Leading sugar companies like Dhampur Sugar and Rajshree Sugar have announced investments in the state. Mishra also said the Narkatiaganj unit of C S Nopany's Oudh

Sugar has bagged orders for supplying 36,000 kilolitres of ethanol to oil marketing companies for ethanol-blended programme in the state.

The Union ministry of petroleum has initiated a national programme for 5 per cent ethanol-blended petrol and is planning to increase it to 10 per cent.