The Centre has notified an interest subvention scheme for cooperative sugar mills to support ethanol production, according to an official release issued on Friday.
Under the scheme, the government will offer interest subvention on converting existing sugarcane-based ethanol plants into multi-feedstock-based units, said the Ministry of Consumer Affairs, Food & Public Distribution, which has notified it.
This means that ethanol plants, which currently use only sugarcane juice or molasses, will be incentivised to process other raw materials like maize and agricultural residues.
The government, as per the scheme, will offer support with interest subvention at "6% per annum or 50% of rate of interest charged by banks/financial institutions, whichever is lower," the release added.
The sugarcane crushing period is restricted to 4-5 months only in a year due to which sugar mills can operate for a limited period of time. This further leads to reduction in their overall operational efficiency and productivity, the consumer affairs ministry explained.
To ensure the functioning of cooperative sugar mills throughout the year, their existing ethanol plants can be converted into multi-feedstock based plants to use grains like maize and damaged food grains under the new modified scheme, it added.
This initiative aligns with the Ethanol Blended Petrol Programme of the central government, which has a target of 20% blending of ethanol with petrol by this year.
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