Closed Sugar Mills May See Revival As Government Mulls Ethanol Production On Their Land
Sugarcane stalks are unloaded for crushing at a sugar mill. (Photographer: Pankaj Nangia/Bloomberg)

Closed Sugar Mills May See Revival As Government Mulls Ethanol Production On Their Land


The government is planning to come out with a policy to revive closed sugar mills by using their land for ethanol production, Union Minister Nitin Gadkari said.

He said the ethanol economy has the potential to reach Rs 1 lakh crore from about Rs 25,000 crore and can reduce the annual Rs 7 lakh crore crude imports.

"A lot of sugar mills are closed. I'm going to frame a policy. Condition of these sugar mills is such that they are not getting finances. I want to proceed for a Cabinet note. Some 5-6 acres of land in a closed sugar mill which can be used for making of ethanol," Gadkari said.

The minister said land of the sugar mill can be utilised for ethanol production from sugar, sugarcane juice and molasses and policy will be framed soon. Gadkari said there was an agreement with multilateral banks like Germany-based KfW for low-cost funds green energy.

"Already we have signed an agreement with KfW for green energy in medium and small enterprises. I will try to convince them to finance sugar mills proposal and we will find out a mechanism with the petroleum ministry for this," the minister said.

He said ethanol production through sugar could boost the economy of sugarcane-producing states like Uttar Pradesh, Bihar, Maharashtra, Punjab and Haryana. The minister also said the government does not intend to ban petrol or diesel by giving thrust to alternative fuel.

"There are no talks on ban of petrol or diesel. We want to encourage alternative energy. GST is less (on alternative energy fuel). A time will come when India will become the hub for manufacturing of electric vehicles and vehicles on alternative fuel," he said.

Last week, Gadkari said he has cleared a Cabinet note on the proposed vehicle scrappage policy, which has ben approved by the finance ministry as well.

In May 2016, the government had floated a draft Voluntary Vehicle Fleet Modernisation Programme that proposed to take 28 million decades-old vehicles off the roads.

Also read: Hungry Cows Reduced Sugar Output in a Top Producing Region in India

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.