Gadkari urges Indian sugar mills to move beyond sugar into ethanol and compressed biogas

India's Union Minister Nitin Gadkari has told the country's sugar mills to stop relying on sugar revenue alone and to build a wider portfolio around ethanol, compressed biogas (CBG) and other value-added products, Dainik Jagran reported. He was speaking at the excellence award ceremony of the National Federation of Cooperative Sugar Factories (NFCSF), where he framed diversification as the route to stronger mill finances and higher farm incomes.

His central argument was market structure. Sugar is a global commodity, and when large producing countries raise output, international prices fall sharply. Indian mills are exposed to that swing because prices are set by worldwide supply and demand rather than by domestic conditions alone. Gadkari pointed to Brazil, where large-scale mechanised cane cultivation and its cost base can move international sugar prices whenever the country produces more than it needs. On that reading, a mill whose income depends on a single commodity has no defence against a price cycle it cannot influence.

Diversification into energy, argued since 2004

The minister described “diversification of agriculture towards the energy and power sector” as a position he has advocated since 2004, and said converting knowledge and technology into wealth will be decisive for the future of Indian agriculture. He called on mills to focus on the economic value locked in the by-products and waste generated across the agricultural value chain — an approach he labelled “waste to economy”. Agricultural residues, he argued, can be converted into fuel and other products rather than left as a disposal problem.

The feedstocks he named are already available in volume at or near sugar mills:

• sugarcane bagasse
• paddy straw
• bamboo and napier grass

Ethanol and CBG as second revenue lines

Ethanol was presented as one of the main openings for the sugar industry. Cane juice and other feedstocks can be converted into ethanol, while distilleries and integrated sugar complexes can capture additional value from the products generated during processing. Jagran noted that two opposing views on ethanol are currently in circulation in India, placing the minister's push inside an unresolved domestic debate over how far the industry should go in turning farm output into fuel.

On compressed biogas, Gadkari said the technology to produce CBG from paddy straw, bamboo, bagasse and napier grass is now available. Citing government figures, he said 1,908 CBG plants are registered in the country, of which 132 are active — a gap that shows how little of the announced pipeline has reached operation.

Feedstock supply is not the constraint. According to media reports cited by the minister, roughly 22 million tonnes of paddy straw is burned every year in Punjab and Haryana, a volume he identified as significant potential raw material for bioenergy. Converting crop residue into fuel, he said, would address a waste-management problem, reduce fossil fuel imports and create an additional income stream for farmers.

Press mud and wax in the value chain

Gadkari also pointed to value addition further down the processing chain. Press mud and wax recovered at sugar mills can be directed into higher-value applications. He cited mills in Satara, where wax obtained from cane processing sells for ₹300–₹350 per kilogram and is used by the beauty products sector.

For mill operators, the pitch reframes the plant as a multi-product site — sugar, fuel ethanol, compressed biogas and specialty outputs from residues — rather than a single-commodity processor exposed to world sugar prices. How much of that materialises depends on how quickly registered CBG capacity converts into operating plants, and on how the domestic ethanol debate is settled.