India hit E20 five years early but the sugar industry it was...
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Apr 11, 2026
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India hit E20 five years early but the sugar industry it was supposed to save can't even pay its farmers on time!
Here's what's actually going onš§µ
Here's what's actually going onš§µ
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1/ In January 2026, India crossed a milestone most people missed. Ethanol blending in petrol touched 19.98% (essentially 20%).
The E20 target, originally set for 2030 was met nearly five years early. On paper, this should have been the sugar industryās finest hour. For years, the pitch was simple ā Indiaās sugar mills would make ethanol from sugarcane.
That ethanol would go into your petrol. Mills were guaranteed to earn steady income, farmers would get paid on time, and India would import less crude oil.
All of it seems like a neat, perfectly square story. Except, it isnāt.
The E20 target, originally set for 2030 was met nearly five years early. On paper, this should have been the sugar industryās finest hour. For years, the pitch was simple ā Indiaās sugar mills would make ethanol from sugarcane.
That ethanol would go into your petrol. Mills were guaranteed to earn steady income, farmers would get paid on time, and India would import less crude oil.
All of it seems like a neat, perfectly square story. Except, it isnāt.
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2/ Sure, India did hit the E20 targets. But it did it mostly with maize. In the 2024-25 ethanol supply year, corn quietly became the single largest feedstock, contributing nearly half of all ethanol produced. On the other hand, sugarcaneās share slipped to roughly a quarter.
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3/ However, this is the part that doesnāt get talked about enough. Mills across Maharashtra and UP borrowed aggressively to build distilleries. Over ā¹40,000 crore was invested in sugarcane-based ethanol capacity. The idea was that when E20 arrived, these mills would be running at full tilt. Everyone would be earning money and farmers would be able to clear their dues.
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4/ But again, thatās not what happened. Instead, oil marketing companies handed the bulk of their ethanol contracts to grain based producers. Sugarcane mills got a shrinking slice of a pie they thought they owned. And this is where things get really uncomfortable.
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5/ In Maharashtra, the crushing season has collapsed to about 100 days from 150. Sugarcane acreage is falling and mills built for surplus are running at half capacity. Three out of every four cooperative mills in the state havenāt fully paid farmers this season. Total unpaid FRP dues have crossed ā¹4,900 crore.
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6/ The government, meanwhile, raised the FRP that mills must pay farmers. But it didnāt raise ethanol procurement prices. And sugar is selling below production cost, which means mills are squeezed on every side. This amounts to higher costs and lower revenue. The lifeline that these mills were promised from the ethanol boom are all now allocated elsewhere.
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7/ The real irony is Indiaās biofuel programme was designed around the sugarcane industry. It was supposed to fix the old cycle of surplus production, crashing prices, and unpaid farmers. But by the time the programme succeeded, the industry had already been written out of the script.
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8/ Can you call a policy a success if the people it was meant to rescue are worse off than before? Share this with someone who was hopeful of the E20 boom in the country and follow @finshots for more such content!