Indian states impose, repeal ethanol taxes as biofuels policy chaos takes hold

In India, Maharashtra state will remove its interstate export fee on ethanol, to help make production of ethanol from sugar economically viable. The national government is considering reducing or removing taxes on ethanol for the same reason. Maharashtra is one of the two major sugar producing states, along with Uttar Pradesh. But West Bengal will impose a $0.20 per gallon tax on ethanol imported from other states. Bihar and Uttar Pradesh also have imposed an export fee.

India announced an E10 mandate that would take effect in October 2008. The Indian Minister of Agriculture previously called a meeting of sugar-producing states to establish a framework for cooperation.

India is projected to have a surplus of 11.5 million tonnes, based on a projected 33.15 million tonnes harvest this year, which would be a world record for national sugar production. Recently, 10 sugar-producing states have agreed to a framework for a national E10 mandate. India’s sugar crop this year is expected to exceed 29 million metric tons. With domestic consumption at 19 million tons and exports at 1.5 million tons, the country is turning to ethanol production to avoid a catastrophic sugar glut.

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