As sugar stocks in Maharashtra are piling up, the Sugar Commissioner in the Indian state is urging the local government to provide financial assistance to cooperative sugar mills that want to start producing ethanol.

The Maharashtra government should make available INR 5 billion (EUR 63.6m) of funding for ethanol projects at sugar mills as per a recommendation by Commissioner Shekhar Gaikwad, the Hindu Business Line reports.

Sugar use is declining and prices on international markets are lower than what Indian producers seek, so producing ethanol could be a winning strategy. According to the report, the investment in ethanol production capacity at a sugar mill that can crush 500 tonnes per day would be INR 485 million. For bigger mills, whose cane crushing capacity is 2,000 tonnes per day, the cost would be about INR 1.27 billion. A model under which government funds cover 30% of the equity investment is being discussed.


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