Modified Ethanol Interest Subvention Scheme

• The Government of India has introduced a modified Ethanol Interest Subvention Scheme to support Cooperative Sugar Mills (CSMs) in expanding ethanol production beyond sugarcane.

Objective:

• Enhance the operational viability of Cooperative Sugar Mills (CSMs).
• Facilitate the conversion of sugarcane-based ethanol plants into multi-feedstock facilities.
• Ensure year-round ethanol production by utilizing maize, damaged food grains (DFG), and other feedstocks along with sugarcane.

Key Features of the Modified Scheme:

• Interest subvention provided at 6% per annum or 50% of the bank interest rate.
• Applicable for loans taken for five years, including a one-year moratorium.
• Financial support to expand ethanol production beyond sugarcane dependency.

Advantages of Multi-Feedstock Conversion

• Enables CSMs to utilize various raw materials, ensuring continuous operation.
• Improves operational efficiency and financial sustainability of sugar mills.
• Reduces dependence on imported fossil fuels, supporting India’s energy security.

Impact on Ethanol Blending Targets:

• The government is working towards achieving 20% ethanol blending in petrol by 2025.
• As of February 2025, the blending rate reached6%, marking significant progress.
• The expansion of ethanol production capacity will help meet the EBP Programme’s goal.