The Indian Sugar and Bio-energy Manufacturers Association (ISMA) has submitted a 10-point proposal to the Government of India, urging comprehensive GST rationalization and targeted policy support for the biofuel and clean mobility ecosystem. The proposals aim to deliver rapid emissions reductions, safeguard farmer livelihoods, reduce crude oil imports, and accelerate India’s pathway to Net Zero.
The key proposals include:
- GST rationalization: Reduce GST on Flex-Fuel Vehicles (FFVs) and hybrids to 5%, aligning them with electric vehicles.
- Ethanol promotion: Reduce GST on Hydrous Ethanol (E85/E100) to 5% to make it competitive with petrol.
- Ethanol production: Lower GST on ethanol-related equipment to 5% to accelerate sectoral growth.
- Isobutanol trials: Allocate ₹200 crore for technical validation and commercial-scale trials for isobutanol blending with diesel.
- Bharat Biofuels Alliance: Establish a platform to drive innovation, research, and policy development in the biofuels sector.
- Bio-Energy Hubs: Create integrated bio-energy hubs in sugar refineries to produce various biofuels and green energy.
- National SAF Policy: Launch a policy with a ₹10,000 crore fund to support India’s aviation decarbonization targets.
- Green Bio-Hydrogen: Allocate ₹1,500 crore for viability gap funding to establish green bio-hydrogen production centers.
- Compressed Biogas (CBG): Provide capital support, simplified environmental clearances, and a premium pricing structure for CBG production.
- Ethanol Cookstoves: Reduce GST on ethanol cookstoves to 5% and extend subsidies to low-income households.
ISMA Director General Deepak Ballani emphasized that these proposals present an unprecedented opportunity to align India’s tax structures and energy policies with clean air goals, rural economic stability, and long-term energy security. With surplus ethanol availability and mature production capacity, India can secure significant emissions reduction without waiting for new infrastructure rollout. The proposals aim to transform the Indian sugar complex into a multi-vertical ‘BioEnergy Hub’ for the world, positioning rural India as a clean energy powerhouse.