Public sector oil marketing companies have unveiled a lucrative incentive of Rs 6.87 per litre for the production of ethanol derived from C-heavy molasses, a by-product of sugar factories. This strategic move is poised to bolster the green economy by efficiently utilising C-molasses for ethanol production.Green Incentive for Maximum Ethanol OutputThe incentive, announced by oil companies, aims to maximise ethanol production through the C-molasses route. This initiative is anticipated to enhance the overall availability of ethanol, supporting the Ethanol Blended Petrol Programme.Union Petroleum Minister Commends the MoveUnion Petroleum Minister Hardeep Puri lauded the decision, emphasising its positive impact on farmers prosperity, foreign exchange conservation, and sustainability. He stated in a tweet, Ensuring farmers prosperity, saving precious foreign exchange and driving sustainability! Rs 6.87/litre incentive for ethanol from C molasses by Public Sector OMCs bolsters GreenEconomy...Government Guidelines on Ethanol ProductionIn early December, the Food Ministry directed sugar mills to refrain from using cane juice or syrup for ethanol production. However, the government subsequently permitted the use of juice and B-heavy molasses for ethanol production, capping sugar diversion at 17 lakh tonnes for the current marketing season.Challenges to Ethanol Production TargetDespite the governments ambitious targets of achieving 20% ethanol-blended petrol by 2024-25 and 30% by 2029-30, challenges have arisen due to the suspension of ethanol production from sugarcane juice in 2023-24. Crisil recently reported potential setbacks to these targets.Blend Advancements and E20 Fuel TargetEthanol from cane juice contributes 25-30% to the total ethanol produced in the country, with B-heavy molasses contributing over 60-65%. India has already implemented 20% blended fuel in a phased manner since April 2023, with the widespread availability of E20 blending expected soon.Governments E20 Fuel InitiativeE20 blending in petrol was introduced by the Centre to address oil import costs, enhance energy security, reduce carbon emissions, and improve air quality. The government accelerated the E20 fuel target from 2030 to 2025, aligning with its commitment to a cleaner and more sustainable future.