To encourage more sugar mills to divert sugarcane for producing ethanol rather than sugar, the Centre is all set to increase the procurement price of all three categories of ethanol produced from different sources by between Rs 2.50-3.0 per litre for the 2020-21 season.
Sources said the Cabinet Committee on Economic Affairs (CCEA) is expected to decide on the same soon.
At present ethanol production is allowed from C-heavy molasses, B-heavy molasses, sugarcane juice or syrup or direct sugar. It is also allowed to be made from broken unused grains. The price hike recommendation is for ethanol derived from sugarcane.