India promotes sugar mill diversification into ethanol and biogas

Union Minister Nitin Gadkari has urged Indian sugar mills to diversify their operations beyond sugar production to improve economic viability and farmer incomes. Speaking at a National Federation of Cooperative Sugar Factories Ltd ceremony, Gadkari emphasized the need to transition toward energy and power sectors by utilizing agricultural residues like bagasse, paddy straw, and bamboo through a “waste to wealth” approach. He noted that reliance on sugar alone leaves mills vulnerable to global price fluctuations, particularly from large producers like Brazil.

To support the transition to bio-energy, the Indian government has operationalized the Rs 23,731-crore GOBARdhan scheme for compressed biogas (CBG). The scheme, running from 2026-27 to 2035-36, aims to convert organic waste—such as cattle dung and food waste—into biogas and organic manure. To attract private investment, the Petroleum and Natural Gas Ministry has introduced guidelines offering producers assured offtake of up to 100 per cent of their output and a government-backed administered price for at least 10 years. The initiative seeks to achieve nearly ten-fold growth in domestic CBG production by integrating the gas into existing City Gas Distribution networks.