Context

• Converting surplus sugarcane and its products, including sugar and cane juice, into biofuel has unwarranted ecological ramifications, which are cause for concern. 

Status of Sugar Industry

• From being a constant seeker of government assistance, the Indian sugar industry has transformed into a vibrant, self-sustaining sector, achieving performance records on all fronts without any subsidy.
• The output of sugarcane touched a new peak of 500 million tonnes in 2021-22 and that of sugar swelled to a new high of 39.4 million tonnes, of which 3.6 million tonnes was diverted to ethanol production. Sugar exports also surged to a record 11 million tonnes.
• The outstanding cane price arrears payable to farmers have shrunk to the lowest ever level of less than 2 per cent.

Reasons for Flourishing Sugar Industry

• Converting surplus sugarcane and its products, including sugar and cane juice, into biofuel has favored both the sugar industry and cane growers.
• Rise in sugar exports was aided partly by 
  • favorable international prices in the aftermath of the Russia-Ukraine conflict 
  • lower supplies from Brazil, the world’s largest sugar exporter. 
• The additional revenue generated from exports and sugarcane-based biofuel has helped improve the industry’s financial health, enabling it to make timely payments to cane growers and invest in expanding ethanol-manufacturing capacity. 

Significance of Ethanol Production from Sugarcane Surplus

• The permission granted to sugar mills to make ethanol from their surplus produce is highly significant which would otherwise have resulted in depressed domestic prices.
• The resultant increase in the availability of biofuel has enabled oil-marketing companies to raise the level of ethanol-blending of petrol to 10 per cent and look forward to increasing it further to 20 per cent by 2025.
• Note: Last year, the Union Cabinet approved amendments to the National Policy on Biofuels, 2018, to advance the ethanol blending target of 20% blending of ethanol in petrol to 2025-26 from 2030.

Adverse effects of sugarcane cultivation on groundwater resources

• Much of the expansion in cane acreage has occurred in states like Uttar Pradesh, Maharashtra, and Karnataka, where subsurface water is already being depleted at an alarming pace. 
• In any case, a land- and water-stressed country like India can ill-afford the luxury of producing first-generation (1G) ethanol from feedstock like sugarcane, including sugar, sugar syrup, cane juice, B-heavy molasses and C-heavy molasses, or cereals like rice, wheat, barley and corn, which are also now being used for biofuel production. Hence this policy would need to be revisited. 

Way Forward

• A fine balance would need to be maintained between food and water security and fuel and energy security.
• The best option for India would be to utilize the huge amount of residual biomass that its farm sector generates to produce biofuel through second-generation (2G) ethanol-production technology, rather than using water-guzzlers like sugarcane or cereals. 

Related Information

Biofuels

• Biofuels are liquid or gaseous fuels produced from biomass that are generally high in sugar (such as sugarcane, sugarbeet, sweet sorghum), starch (such as corn and cassava) or oils (such as soybeans, rapeseed, coconut, sunflowers, and palms). The two most commonly used biofuels are ethanol and biodiesel.

Categories of Biofuels

• First generation Biofuels are mainly produced from food crop feedstock, such as oil, sugar and starch crops, thus competing for agricultural areas used for food production.
• Second generation Biofuels differ in feedstock which, in this case, comes from non-food plants such as agricultural crops, residues and wood (so-called lignocellulosic biomass).
• Third generation Biofuels are produced from micro-organisms like algae. Its production is supposed to be low cost and high-yielding – giving up to nearly 30 times the energy per unit area as can be realized from current, conventional ‘first-generation’ biofuel feedstocks.
• Fourth generation Biofuels use genetically modified (GM) algae to enhance biofuel production. Key to the process is the capture and sequestration of CO2, a process that renders fourth-generation biofuels a carbon negative source of fuel.