The Indian Sugar and Bio-energy Manufacturers Association (ISMA) has urged the Government to take up comprehensive GST rationalisation and targeted policy support across the biofuel and clean mobility ecosystem.
The Association suggested measures so that the sugar sector can become a multi-vertical bio energy hub. The government should rationalise GST on flex-fuel vehicles and hybrids, positioning them alongside EVs as a mainstream solution. It should incentivise advanced biofuels, including SAF, green hydrogen, and Isobutanol, said Deepak Ballani, Director General of ISMA.
With surplus ethanol availability, mature production capacity, and vehicle technologies available in the country, there can be significant reduction in emissions.
The GST on Hydrous Ethanol (E85/E100) should be reduced to 5% from 18 % and on ethanol production machinery to 5%. As in the case of solar energy, all ethanol related machinery should be brought under 5 % duty. The government can consider launching a Bharat Biofuels Alliance (BBA) to drive innovation, research, policy development and collaboration across the biofuels value chain and create integrated bio-energy hubs in sugar refineries. the ISMA sought ₹2,000 crore support fund to convert sugar mills into integrated bio-energy hubs producing 1G/2G ethanol, CBG, SAF, bio-hydrogen, green electricity and bio-based products.
Published – January 16, 2026 08:03 pm IST
