Sugar stocks in focus as India nears 20% ethanol blending target in two months

Sugar stocks such as Praj Industries, Balrampur Chini, Bajaj Hindustan Sugar, and Dalmia Bharat will be in focus after Union Minister Nitin Gadkari announced that India is set to achieve its 20% ethanol blending target within the next two months. The practice of blending ethanol with petrol began as a pilot project in 2001.

"We will achieve this target of 20% ethanol blending in the next two months. The use of E20 (petrol with 20% ethanol) will help in reducing pollution," Gadkari said while speaking at an event.

Gadkari highlighted that Tata Motors, Mahindra & Mahindra, Maruti Suzuki, and Hyundai Motors have started producing vehicles capable of running on 100% bio-ethanol.


Also Read: Q3 results today: RIL, Infosys among 37 companies to announce earnings on Thursday

He also mentioned the severe pollution problem in India, noting that 42 Indian cities rank among the 50 most polluted in the world. He pointed out the country's dependence on fossil fuel imports, which amounts to ₹22 lakh crore, contributing significantly to pollution.

Prime Minister Narendra Modi launched the initiative for 20% ethanol-blended petrol in 2023, initially covering 15 cities. The use of ethanol, extracted from sugarcane, broken rice, and other agricultural produce, is expected to reduce India’s dependence on oil imports. India currently relies on imports for 85% of its oil needs.

Also Read: Q3 numbers a concern, mutual funds buy defensives

The use of E20 leads to an estimated reduction of carbon monoxide emissions by about 50% in two-wheelers and about 30% in four-wheelers compared to E0 (neat petrol).
The target of achieving an average 10% blending was met in June 2022, well ahead of the target date of November 2022.

Automobile engines can run on E20 with minor modifications to the engine for corrosion protection, etc.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)