Closed sugar mills may see revival soon as government mulls ethanol production on their land

Published : Sep 23, 2019, 6:33 PM IST

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.

Closed sugar mills may see revival soon as government mulls ethanol production on their land

Union Minister Nitin Gadkari

New Delhi: 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 on Monday.

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 am 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 the 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 KfW for low-cost funds green energy.

"Already we have signed an agreement with KfW for green energy in MSMEs. 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 the ban on 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 been approved by the finance ministry as well.

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