The food ministry has issued a fresh order reversing ban on the use of sugarcane juice for making ethanol and allowed utilisation of the juice as well as B-heavy molasses to produce the green fuel in the 2023-24 supply year.

The revised order comes days after the Centre on December 7 banned use of sugarcane juice and sugar syrup for the 2023-24 supply year (November-October) in an order to ensure adequate sugar supply in the domestic market and check prices.

In a directive issued to all sugar mills and distilleries, the ministry said the oil marketing companies (OMCs) will issue a “revised allocation” of “sugarcane juice and B heavy molasses-based ethanol” for the 2023-24 supply year to “each distillery”.

OMCs have been asked to inform the food ministry after placement of revised contracts.

After receiving the revised allocation, sugar mills and distilleries have been asked to supply ethanol strictly as per the revised quantity of cane juice and B-heavy molasses.

“No diversion of sugarcane juice and B heavy molasses is allowed for production of rectified spirit and extra neutral alcohol,” the directive said.

All molasses-based distilleries will endeavour to make ethanol from C-heavy molasses, it added.

A decision in this regard, Food Secretary Sanjeev Chopra said, was taken in the meeting of a committee of ministers held on Friday.

He said the government has decided to give flexibility to use both cane juice and B heavy molasses within a overall cap on diversion of sugar of up to 17 lakh tonnes in the current 2023-24 supply year.

Already 6 lakh tonnes of sugar has been diverted for making ethanol from cane juice before the ban, another food ministry official had said.

The government has estimated sugar production to decline to 32.3-33 million tonnes in the 2023-24 season (October-September) as against 37.3 million tonnes in the previous season.