Aiming to promote investments in the sugar industry ensuring a hassle-free business environment, the UP government has decided to set up a portal for online approval of projects for setting up ethanol plants across the state. Chief Minister Yogi Adityanath has directed officials to grant approvals to the investors within a fortnight from the date of application. In case of delay, it will be deemed an approval.

The sugar industry in UP had represented to the state government that, backed by the Centre’s encouragement, the industry was keen on making investments in the ethanol sector and sought certain assurances to motivate the industry to invest.

Earlier this year, the state government had announced an Ethanol policy. Last year, the Union government had also announced the policy for augmenting the production of ethanol and persuading more and more sugar mills to divert cane for producing ethanol in order to reduce the glut of sugar in the domestic market. The state government’s move was set to attract fresh investment besides addressing the problem of glut in sugar production. Sugar mills of the state will now be able to divert excess sugarcane for ethanol plants for producing the chemical directly from cane juice.

The new ethanol plants will be beneficial for all stakeholders — the industry and farmers and also add to the government’s exchequer. Among the assurances that the sugar industry was seeking was that cane juice produced by units would not be subject to any reservation, preferential allotment or pricing control. The government has been also asked for an assurance that if a multi-unit sugar company opts for setting up a unit to manufacture ethanol directly from cane juice, the reservation of this particular unit would not be considered in computation of total available molasses. This assumes importance as Uttar Pradesh follows a policy for reserving molasses for production of country liquor, which is currently at 17 per cent of the total available molasses. The optimism in UP’s sugar industry  for ethanol plants stems from the fact that the Union  Petroleum  Ministry has been hiking the procurement price of ethanol made from cane juice. A positive policy encouragement would go a long way in reducing excessive sugar production and its resultant difficulties. A sugar glut usually leads to negative market sentiment, thereby hampering the mills’ ability to clear farmers’ cane dues. Sugar sector in UP, having produced over 126 lakh quintal of sugar in 2020-21, was staring at a piquant situation, where its outstanding cane dues were above Rs 16,000 crore and hence sugar industry honchos felt that ethanol seemed to be the only way out as it was the sugar sector’s cash cow, as oil marketing companies usually paying in 30 days for ethanol.