The proposal is to set up 200 kilolitres per day (klpd) molasses-based distillery and 6 mw co-generation power plant at Hariawan village.
"The environment clearance to the DCM Shriram's new distillery project in UP has been given. The environment ministry has given approval based on the recommendations of its expert committee," a senior government official said.
The approval has been accorded subject to certain conditions and the project is estimated to cost around Rs 188 crore, the official added.
A limit of 1,792 klpd has been imposed for use of groundwater and the company has been asked to harvest rainwater and install piezometer to monitor water recharge.
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The company has also been told not to discharge effluent from distillery outside the plant premises and ensure bagasse is stored in such a way that it does not get air borne or fly around because of wind.
The company informed the government that it will source the raw materials -- molasses and bagasse -- from its own sugar mills located near the proposed project.