New Delhi: The Union Food Ministry on Thursday (October 22) informed all sugar mills about a ban on ethanol production from sugarcane juice/syrup or B-Heavy Molasses (BHM). The Ministry’s communication came right after oil marketing companies announced they would not purchase ethanol made from these two sugar-based feed stocks, reported The Hindu Business Line.In its letter, the Ministry said that diversion of sugar to ethanol is not permitted in ensuing Ethanol Supply Year (ESY) 2026-27 (November 2026 to October 2027).“Accordingly, Sugar Mills/Distilleries are not allowed to produce ethanol from sugarcane juice and B-heavy molasses in the ensuing ESY 2026-27,” said the letter.The latest development comes amid growing concerns about sugar shortage as a result of increasing ethanol production. In the 2025-26 sugar season (October-September), India faced a sugar shortage, a situation that is likely to be repeated in 2026-27 as well.In another letter, the Ministry informed officials of excise department in all the sugar producing states about the ban.“As per the decision of the Government of India, diversion of sugar for ethanol production shall not be permitted during the ensuing Ethanol Supply Year (ESY) 2026-27,” it said.The Ministry has also requested the officials in states to issue requisite instructions to all concerned in their respective states for ensuring strict compliance with the decision of a ban on ethanol production from sugarcane.“The State Excise Department may also take necessary measures to monitor compliance and ensure that no ethanol is produced from sugarcane juice and B-heavy molasses during ESY 2026-27,” said the Ministry, reported The Hindu Business Line.The Union government’s E20 policy has faced severe backlash with online campaigns, RTI applications, and petitions in the Supreme Court demanding transparency as well as continued availability of ethanol-free petrol.Complaints of of unusual wear and tear in engines, fuel tanks, carburettors and fuel lines have emerged since the policy’s implementation last month – five years ahead of schedule. A key issue with the policy’s premature rollout was that vehicle manufacturers had not yet optimised engines for E20 fuel, forcing car owners to use it in vehicles designed for E10 or lower ethanol blends.