The Department of Food & Public Distribution, Government of India, has unveiled a new scheme under the modified Ethanol Interest Subvention Scheme aimed at empowering Cooperative Sugar Mills (CSMs) to expand their ethanol production capabilities.
The scheme encourages CSMs to convert their existing sugarcane-based ethanol plants into multi-feedstock facilities, enabling them to utilize grains like maize and Damaged Food Grains (DFG) for ethanol production.
Financial Incentives for CSMs
Under this modified scheme, the government will provide significant financial support to CSMs:
- The Central Government will bear 6% per annum or 50% of the interest rate charged by banks/financial institutions, whichever is lower, on loans extended to CSMs for this conversion.
- This interest subvention will be provided for five years, including a one-year moratorium.
Addressing Operational Challenges
The initiative addresses the operational limitations faced by CSMs due to the seasonal nature of sugarcane crushing, which typically lasts only 4-5 months a year.
- Converting to multi-feedstock plants will allow CSMs to operate throughout the year, utilizing grains when sugarcane is unavailable.
- This conversion will improve the overall operational efficiency and productivity of the ethanol plants.
- Year-round operation will enhance the financial viability of these cooperative ethanol plants.
This scheme is a crucial component of the government’s Ethanol Blended Petrol (EBP) Programme, which aims to achieve 20% ethanol blending with petrol by 2025.
- The scheme will contribute to meeting the national ethanol production targets.
- The government has implemented various ethanol interest subvention schemes since July 2018 to support this program.
