Big step of Central Government: Major changes proposed in six decade old law related to sugarcane, ethanol economy will get a boost
Delhi. The Central Government has proposed to replace the Sugarcane Control Order of 1966 with a comprehensive new regulatory framework. For the first time, a formal system for ethanol production, digital compliance and approval of factories has been brought together. The government has sought suggestions from people on this draft till May 20. The basic structure of the old law has been retained in the draft Sugarcane (Control) Order 2026 of the Union Food Ministry.
This includes fair and remunerative price (FRP) rules, control on movement of sugarcane, payment deadline of 14 days and 15 per cent annual interest on delayed payment. However, a new structure has been prepared in accordance with the completely changed industry.
The most significant change from the 1966 law is the explicit inclusion of ethanol in the sugarcane regulatory framework and the draft expands the definition of sugar factory to also include ethanol production from sugarcane juice, syrup, sugar and molasses.
For this, a concrete conversion formula has been introduced, under which 600 liters of ethanol will be considered equivalent to one ton of sugar while calculating production. Only ethanol manufacturing units, which do not crush sugarcane at their premises, are exempted from the requirement of performance bank guarantee. This is a deliberate policy initiative to increase stand alone ethanol capacity without diluting controls on integrated sugar-cum-ethanol mills. Such provisions have been included in Sections 6A to 6G of the draft, which were not in the old order.
These include a formal IEM-based approval process for new factories, minimum distancing norms, increasing the performance bank guarantee to Rs 2 crore and setting effective measures and strict timelines for commercial production. Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd, said the 1966 order was much before the ethanol economy, so a new law was needed. On the other hand, All India Sugar Trade Association Chairman Prafulla Vithalani said that in the draft, a provision has been made to tighten monitoring on Khandsari units also.
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