Nitin Gadkari says plain sugar's future is not bright: After E20, transport minister wants sugar mills to produce a gas that can be used in CNG vehicles and fuel that can power aircrafts

Nitin Gadkari, Union Minister for Road Transport and Highways, has called on sugar mills to start producing compressed bio-gas (CBG), ethanol, bio-manure and sustainable aviation fuel after recent transitation of world's third-largest car market to E20 petrol, which contains 20% ethanol, from E10.

Addressing the National Efficiency Awards ceremony organised by the National Federation of Cooperative Sugar Factories, Gadkari has said that India’s agriculture sector can help drive down imported costs of fossil fuels, while at the same time using a combination of futuristic technology and a forward-looking vision if it is to become economically sustainable and help drive prosperity in rural India.

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'Future of plain sugar mediocre'

During the event, Gadkari had asked sugar mills to expand into value-added by-products, particularly compressed bio-gas (CBG), ethanol, bio-manure and sustainable aviation fuel.

"The future of plain sugar is mediocre at best. I won't mince words: diversifying into complementary by-products guarantees a strong future," the Minister said.

The minister said that converting and making better use of sugarcane by-products could also improve returns for farmers. He said the additional value generated through these products could eventually enable sugar mills to pay farmers as much as Rs 6,000 per tonne of sugarcane, compared with the current Rs 4,000.

"Instead of dumping waste into road embankments, if we convert it into gas - into CBG - our imports will decline. Understand this figure: Rs 22 lakh crore. We are sending Rs 22 lakh crore out of our country to import fossil fuels - petrol, diesel, and gas," Gadkari said according to ANI.

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"Technology has arrived, allowing us to produce CBG from stubble, bamboo, rice straw, bagasse, and Napier grass. The Government of India launched a dedicated scheme. Look at the numbers: 1,908 CBG plants have been registered across the country, with 132 already operational," he said.

India has the potential to produce 50,000 tonnes of CBG per day, Gadkari said, but present output accounts for only around two per cent of that capacity.

The government has also introduced mandatory procurement obligations along with a fixed procurement price of Rs 106 per kg. He said the initiative could bring Rs 2.5 lakh crore into the rural economy and create as many as 15 lakh jobs.

Push for CBG

Recently, Cabinet, chaired by Prime Minister Narendra Modi, approved GOBARdhan, the National Circular Bioenergy Scheme, with a total outlay of Rs 23,731 crore. The scheme will be implemented from FY 2026-27 to FY 2035-36 and aims to increase India's domestic CBG production nearly ten-fold.

Compressed Biogas, or CBG, is a renewable gas produced from organic waste. Feedstocks can include agricultural residue, cattle dung, press mud, municipal organic waste and other forms of biomass. Organic waste is processed through anaerobic digestion, producing biogas. The gas is then purified to remove impurities and concentrated to obtain methane-rich biogas.

It can subsequently be compressed for use as CBG. In simple terms, CBG is essentially a renewable alternative to conventional natural gas, produced from waste rather than extracted from underground fossil-fuel reserves.

The government says CBG is chemically equivalent to natural gas and can therefore be integrated into the existing gas ecosystem.


But is CBG the same as CNG? Not exactly, but they are very closely related. CNG stands for Compressed Natural Gas, which is primarily methane obtained from natural gas reserves. CBG stands for Compressed Biogas, where the methane comes from decomposed organic material. Once purified and compressed to the required standards, CBG has properties similar to natural gas and can be used in applications where natural gas is used. That means CBG can potentially be supplied through the existing gas ecosystem and used as a transport fuel.