Maharashtra Deputy CM Ajit Pawar on Friday said Union Cooperation Minster Amit Shah has assured to find a way out in the next two days to the issue arising out of the Centre's decision to ban the use of 'sugarcane juice and sugar syrup' for ethanol production.

Pawar, who is also the finance minister, said in the assembly the Centre's decision was "sudden" and pointed out that many sugar mills in Maharashtra, one of the top producers of the sweetener in the country, have invested heavily in setting up ethanol plants.

The Centre on Thursday banned the use of ‘sugarcane juice and sugar syrup’ for ethanol production in the 2023-24 supply year, which started this month, to maintain adequate sugar availability for domestic consumption and to keep prices under check. However, the government has allowed use of 'B-molasses', a cane by-product, for ethanol production in 2023-24.

Ethanol, a colourless liquid, is blended with fuel as part of the government's initiative to reduce reliance on crude oil imports.

“The ban on ethanol production from sugarcane syrup was sudden. Many sugar mills have invested in ethanol plants with 5 per cent of their capital and 95 per cent funds borrowed from outside,” Pawar told the legislative assembly after Congress and NCP legislators raised the issue in the house.

Opposition leaders claimed the Centre's decision would adversely affect sugar mills in Maharashtra that have taken loans to set up units to produce ethanol from sugarcane syrup and molasses.

“I have discussed the issue with Chief Minister Eknath Shinde, Deputy Chief Minister Devendra Fadnavis and state Cooperation Minister Dilip Walse-Patil. I also spoke to Union Home (and Cooperation) Minister Amit Shah, who assured me to find out a solution in the next two days," said Pawar.

"If a solution is not found, we will visit New Delhi and discuss the issue with him (Shah). I have also taken up the matter with Union Commerce Minister Piyush Goyal,” he said.

In a letter to all sugar mills and distillers, the Food Ministry directed them “not to use sugarcane juice /sugar syrup” for ethanol production during the 2023-24 ethanol supply year (December-November).

“Supply of ethanol from existing offers received by Oil Marketing Companies (OMCs) from B-Heavy molasses will continue,” the ministry's letter stated.

The central ministry’s decision comes in the backdrop of an estimated fall in sugar production in the 2023-24 marketing year (October-September).

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