The Indian Sugar and Bio-energy Manufacturers Association (ISMA) has urged the Indian government to implement comprehensive GST rationalization and provide targeted policy support to the biofuel and clean mobility ecosystem. The association has outlined a 10-point blueprint to revitalize the sugar sector by transforming it into a multi-vertical bio-energy hub. The key proposals include reducing GST on flex-fuel vehicles (FFVs), ethanol fuels, and related equipment to promote sustainability and enhance the bio-energy landscape.
ISMA Director General Deepak Ballani emphasized that these measures can provide immediate carbon reductions using existing ethanol supplies, production capacity, and vehicle technologies without waiting for new infrastructure. The suggestions include reducing GST on FFV two-wheelers and small cars to 5% to achieve cost parity with petrol vehicles, and lessening GST on E85/E100 ethanol to 5% to ensure pump prices stay aligned with petrol.
The association is also seeking financial assistance of Rs 200 crore to expand advanced biofuels like sustainable aviation fuel, bio-hydrogen, and isobutanol. This includes dedicated funds for technology validation and a Rs 2,000 crore fund for the conversion of sugar mills into integrated bio-energy hubs. Additionally, ISMA is asking for a national sustainable aviation fuel policy with fiscal incentives, creation of a Bharat biofuels alliance, and viability gap funding for green hydrogen projects before the Union Budget 2026-27.
The aim of these proposals is to reduce emissions, protect farmer livelihoods, cut crude oil imports, and accelerate India’s journey towards net zero. By providing targeted policy support and reducing GST on biofuel-related products, the government can promote the growth of the bio-energy sector and achieve its sustainability goals. The ISMA’s blueprint provides a comprehensive roadmap for the development of the bio-energy sector and can help India achieve its climate change mitigation targets. Overall, the association’s proposals have the potential to transform the sugar sector and contribute to a more sustainable and environmentally friendly future for India.