Gone could be the days when ethanol used to be a byproduct of sugar at factories. The Centre has now suggested to all the sugarcane-growing States to consider turning ethanol into the main product to not only reduce dependence on imported fossil fuels, but also to make sugar factories financially viable in the wake of crash in sugar prices in international market.
Deputy Chief Minister Laxman Savadi told reporters here on Tuesday that the suggestion was made to the States at a recent meeting convened by Prime Minister Narendra Modi.
The Minister said sugar factories were in dire straits as the reduction in demand for sugar in international market owing to price fluctuations and excess production had resulted in accumulated losses, unsold stocks, and pending dues towards sugarcane growers.
The Centre had informed States that 6% subsidy on interest towards loans obtained for setting up ethanol production facility would be offered to sugar factories as an incentive.
As a follow-up of this, most of the sugar factories in Karnataka were now in the process of setting up ethanol production facilities, the Deputy Chief Minister said.
He explained that there were three options for production of ethanol — producing from sugarcane juice without sugar production; using 10% of sugarcane juice for ethanol production while the rest would be used for sugar production; and producing ethanol as a mere byproduct. The Centre had proposed price structures for these three types of ethanol production, he said.
The Minister hoped that laying emphasis on ethanol production would also revive the financial condition of sugar mills, which would further help strengthen sugarcane growers.
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