Current Affairs

Zero sugar diversion to ethanol in ESY 2026–27 – cane juice, sugar syrup, B-heavy molasses excluded: Centre

18-10-2026 · English

Zero sugar diversion to ethanol in ESY 2026–27 – cane juice, sugar syrup, B-heavy molasses excluded: Centre

Topics: Economy · 18 October 2026 Current Affairs (UPSC / TNPSC / SSC / RRB)

News

The Centre has directed that sugar diversion for ethanol be 'reduced to zero' in Ethanol Supply Year 2026–27 (ESY: 1 Nov 2026 – 31 Oct 2027). Accordingly, the tender for about 1,100 crore litres of ethanol issued by the public-sector oil marketing companies (IOCL, BPCL, HPCL) on 16 Oct 2026 sought no ethanol made from sugarcane juice, sugar, sugar syrup or B-heavy molasses. C-heavy molasses, maize, broken/damaged grains and surplus FCI rice are allowed. The incentive for maize ethanol was cut from ₹5.79 to ₹2.79 a litre. Reason – drought in Maharashtra and Karnataka has cut sugar output; the aim is to secure domestic sugar stocks and prices. The Government says the E20 target will not be affected.

Key facts

DirectiveSugar diversion in ESY 2026–27 = zero
TenderOMCs (IOCL, BPCL, HPCL), 16 Oct 2026; ~1,100 crore litres
ExcludedCane juice, sugar, sugar syrup, B-heavy molasses
AllowedC-heavy molasses, maize, damaged grains, surplus FCI rice
ReasonDrought – lower sugar output (2025–26: 30.6 million t); 1 Oct stock 3.75 million t
Feedstock shareAbout three-fourths of ethanol now comes from grains

Background

  • Policy: National Policy on Biofuels 2018 (Ministry of Petroleum & Natural Gas); the 2022 amendment advanced the E20 target from 2030 to ESY 2025–26. E20 (20% ethanol in petrol) is now the nationwide standard. Aims – cut crude imports and emissions, raise farm income.
  • Science: ethanol (C₂H₅OH) is made by yeast (Saccharomyces cerevisiae) fermenting sugar/starch. 1G ethanol – cane, grain; 2G – straw, farm residue (cellulose). India's first 2G plant – Panipat (Haryana, IOCL), 2022. 'PM JI-VAN Yojana' (2019) supports 2G.
  • Molasses: the syrup left after sugar is extracted. B-heavy still holds much sugar (using it cuts sugar output); C-heavy is final molasses from which no more sugar can be recovered. Cane-juice use was also curbed in Dec 2023 and relaxed for 2024–25.
  • Economy: Fair and Remunerative Price (FRP) of cane is fixed by the Centre on CACP's advice (Sugarcane (Control) Order 1966, Essential Commodities Act 1955). Levy sugar was abolished in 2013 on the Rangarajan Committee's advice – partial decontrol. Top cane producer – Uttar Pradesh.

Tamil Nadu link: Tamil Nadu has cooperative, public-sector and private sugar mills, many with distilleries. The State announces a 'special incentive' over the Centre's FRP every year. With sugar-based ethanol barred, mills must turn to C-heavy molasses and grain ethanol.

Source: PTI / OrissaPOST, 18 Oct 2026; ChiniMandi, 16 Oct 2026; BusinessWorld (Reuters), 18 Oct 2026; Onmanorama, 6 Oct 2026

Join our UPSC classroom or online batch: UPSC coaching in Coimbatore · Fees · Call 99941 46662.

Share with friends & study groups
Link to this page from your website / blog (HTML code)
More news from the same day
› India's first field study of dengue vaccine (Qdenga) and mosquito repellents begins at Kadayanallur: Minister Arunraj › 'Thenisai Thendral' composer Deva (75) passes away – laid to rest with State honours and 72-gun salute in Ranipet district › PM-AJAY: 18,093 Scheduled Caste-majority villages declared 'Adarsh Grams' (model villages) › US firm Reflect Orbital, which plans to 'sell sunlight at night', books two launches with India's Skyroot Aerospace › North Korea successfully tests a new high-speed torpedo that uses AI to detect and precisely hit targets › India's space economy is about $9 billion now and may reach $40–45 billion in 7–8 years – Minister Jitendra Singh (17 Oct) › Trade margins on anti-cancer drugs capped at 30% – prices may fall by up to 70% › Nutrient-rich purple potato 'Kufri Jamunia' – anthocyanin-rich variety developed by ICAR-CPRI All current affairs →

TET Achievers

  • A. MUTHULAKSHMI

    TET TET