Maharashtra’s ethanol industry needs a clear policy framework to ensure the large distillery capacity created in recent years is fully utilised and remains financially viable, former state health minister Rajesh Tope said, highlighting several challenges that could emerge in the 2026-27 season.
Sugar mills in the state have invested heavily in distillery projects following the Centre’s E20 programme. According to estimates cited by Tope, investment in sugar based distilleries could be between Rs 16,500 crore and Rs 20,300 crore, while the investment associated with Maharashtra’s total ethanol capacity of 16,152 KLPD could range from Rs 21,000 crore to Rs 26,000 crore.
Tope said government policy should ensure steady availability of raw material and better utilisation of the capacity already established. He said the sector also needs to address the use of dual feed technology, maintain an appropriate balance between grain based ethanol and other feedstocks, make efficient use of C heavy molasses and develop value added products from by-products.
Maharashtra has 36 grain based distilleries with an annual production capacity of around 104 crore litres, Tope said. Potential ethanol production from C heavy molasses is estimated at 104.56 crore litres, while grain based production could contribute around 104 crore litres, taking the combined potential to about 208.56 crore litres.
He said the recent increase in domestic sugar prices, along with possible restrictions on ethanol production from direct sugarcane juice and B heavy molasses to manage sugar supply and prices, could put additional pressure on the sugar industry.
Tope said distilleries should be developed as integrated biorefineries that can generate revenue from multiple by-products instead of relying only on ethanol sales. He warned that projects involving large investments could face financial difficulties if their installed capacity remains underutilised.
According to Tope, Maharashtra will have to address three major challenges during the 2026-27 season: maintaining domestic sugar availability and managing prices, ensuring sufficient ethanol for the E20 programme, and maintaining the financial viability of the thousands of crores already invested in the ethanol sector.
He said sugar mills should aim to operate their units throughout the year at high capacity, provided adequate raw material is available and operations remain financially viable.
Tope said the state had built substantial infrastructure for ethanol production and that ensuring full utilisation of this capacity should be a priority.
