SECTION 3 OF 3 · THE TRADE-OFF
How they connect
Every tonne of cane can become sugar or it can become fuel. It cannot become both. This section follows that single choice into the country's sugar stocks, its petrol tanks, its groundwater, and its import bill.
We do not tell you which side is right. We show you the numbers each side uses, mark where they disagree, and hand you the dials at the end.
01 — WHERE THE CANE GOES
One crop, two destinations
The mill's first decision is chemical, not political: how much sucrose to crystallise, and how much to leave in the molasses — or the juice — for the distillery next door. Every 100 kg of fermentable sugar yields about 60 litres of ethanol.
The sugar stream
Most of the crop still ends up as sugar: 306 LMT on the Ministry's figure, 343.5 LMT on industry's first estimate. On the route a tonne of cane gives about 115 kg of sugar and 10.8 litres of ethanol — the leftover costs nothing.
The fuel stream
The other two routes cost a great deal. gives about 95 kg of sugar and 21.75 litres — roughly 20 kg of sugar given up per tonne of cane. gives 84 litres and no crystal at all: 115 kg surrendered. Sugar forgone in 2025-26: about 32 LMT.
- Food stream (solid)
- Fuel stream (hatched)
Flow diagram of the 2025-26 sugarcane crop in sugar-equivalent lakh metric tonnes. 306 LMT was crystallised as sugar. 32.0 LMT of sugar-equivalent went to ethanol, 23.1 LMT of it through the direct-juice route and 8.9 LMT through B-heavy molasses. C-heavy molasses also fed the distilleries but costs no sugar at all. Key point: the juice route is the expensive one — it surrenders the crystal entirely. Full data in the table below.
Widths are sugar-equivalent LMT. The diverted total is the reported figure; the split between routes is derived from the published feedstock volumes and the per-route yield and sugar-loss coefficients. C-heavy molasses is drawn as a hairline because its sugar cost is nil, not unknown.
- Conflicting figures: 306 LMT (Ministry, 21 Aug 2026) against 343.5 LMT (ISMA First Advance Estimate, Nov 2025). ISMA’s November estimate was overtaken by red rot, top borer and waterlogging; both figures still circulate in the same news cycle.
| Route | Sugar-equivalent | Sugar cost | Ethanol volume (crore L) |
|---|---|---|---|
| Crystallised sugar | 306.0 | — | — |
| B-heavy molasses | 8.9 | Partial (~20 kg per tonne of cane) | 82 |
| Direct cane juice | 23.1 | Total (~115 kg per tonne of cane) | 144 |
| C-heavy molasses | 0.0 | None | 11 |
02 — THE ARGUMENT
Two readings of the same season
Both columns are sourced. Neither is our conclusion.
The government says…
- 01E20 arrived five years ahead of target, saving ₹1.97 lakh crore in foreign exchange and substituting 316 lakh tonnes of crude to date.
- 02Ethanol payments reach cane farmers directly — ₹1.66 lakh crore so far — and have cleared long-standing mill arrears.
- 03Diversion is capped season by season and lowered when sugar availability tightens, as it was after the 2023-24 drought.
- 04The 2026 price rise reflects disease and weather losses, not the blending programme; the Food Secretary blames mills selling on paper.
Critics say…
- 01About 32 LMT of sugar forgone is roughly the size of the shortfall that opened the import window.
- 02Cane and rice ethanol carry heavy water footprints in districts already classified over-exploited.
- 03Grain ethanol has pushed India into maize imports for the first time in decades, and DDGS has dragged soybean meal below its own support price.
- 04The official lifecycle CO₂ figure excludes land-use change and irrigation pumping; independent well-to-wheel estimates run materially lower.
- Cane and rice
- Maize
- Published range
Bar chart of irrigation water embedded in a litre of ethanol, by feedstock. FCI rice is the highest at more than 10,000 litres per litre, maize follows at about 4,670, and sugarcane is about 3,000 with a reported range of 2,860 to 3,630. Distillery-stage water is only a few litres per litre. Key point: on these figures the switch from cane to grain does not reduce the water cost per litre. Full data in the table below.
Agriculture-stage footprints, which dominate; distillery-stage water is shown separately for scale. The rice figure is published as "greater than 10,000 litres per litre", so it is a floor and is drawn with an open end. No single citable per-state table exists — see the note below.
- Conflicting figures: Cane most efficient (1,313 m³ per hectare-month) (ICAR-IISR, per hectare) against Cane ~3,000 L per litre of ethanol (NITI Aayog, per litre). Per-hectare and per-litre framings rank the crops differently and both are published. Cane looks efficient per hectare and expensive per litre; neither framing is wrong, and the difference matters because cane is concentrated in water-stressed districts.
| Feedstock | Litres of water per litre | Reported range | Basis | Source |
|---|---|---|---|---|
| FCI rice | >10,000 | — | agriculture stage | NITI Aayog-cited (research_doc_2 Part 1C, 2A) |
| Maize | 4,670 | — | agriculture stage | Water Today / press (research_doc_2 Part 1C, 2A) |
| Sugarcane | 3,000 | 2,860 – 3,630 | agriculture stage | NITI Aayog, Roadmap for Ethanol Blending in India 2020-25 (research_doc_2 Part 1C, 2A) |
| Distillery stage (any feedstock) | 5 | — | distillery stage | ISMA via Abinash Verma (research_doc_2 Part 1C) |
03 — THE SECOND LEDGER
The cost that isn't priced
Sugar and fuel both have a market price. Groundwater does not. A litre of cane ethanol carries roughly 3,000 litres of embedded irrigation water, most of it drawn in the two states with the deepest depletion.
The shift to maize does not fix this. On the per-litre figures our sources publish, maize ethanol carries about 4,670 litres and FCI rice more than 10,000 — both above cane. Per hectare the ranking reverses, which is why both framings keep appearing in the same argument.
This is where the prototype for this site had it backwards: it showed grain as the water-cheap option. On the sourced coefficients it is not.
Every framing of this debate is a choice about which ledger you read first.
04 — THE TOY MODEL
Turn the dials yourself
THIS IS A TOY, NOT A FORECAST. Simple arithmetic on published coefficients. Directional only.
ethanol = petrol(5,080 cr L) × blend%
grainEthanol = ethanol × grainShare
caneEthanol = ethanol − grainEthanol
├ B-heavy = caneEthanol × bHeavyShare
├ juice = caneEthanol × juiceShare
└ C-heavy = the remainder (costs no sugar)
sugarForgone = B-heavy litres ÷ 21.75 L/t × 20 kg/t
+ juice litres ÷ 84 L/t × 115 kg/t
closingStock = production − sugarForgone
+ opening(52.5) − consumption(285)
importNeed = max(0, 47.5 − closingStock)
forexSaved = ethanol × ₹44.3/L
co2Avoided = ethanol × 0.214 lakh MT per cr L
water = caneEth × 3,000 + grainEth × 6,198
(litres per litre, ÷100 for billion litres)At 20% blending, with 65% of ethanol from grain and 306 LMT of sugar produced, India forgoes 40.7 LMT of sugar, closes the season with 32.8 LMT in stock, and needs about 14.7 LMT of imports to hold the comfort norm.
SUGAR IMPACT
↑↑ Strong upward pressure
Direction only. Price is not linear in supply, and no point forecast is offered.
ENERGY & CLIMATE
Ranges span the uncertainty in the cumulative volume these per-litre rates are derived from. The CO₂ figure is the official basis: it excludes land-use change and irrigation-pumping energy, and independent well-to-wheel estimates run materially lower. No citable independent factor exists in our sources, so none is invented here.
WATER FOOTPRINT
Relative to routing every litre through cane at this blend level.
Agriculture-stage water. Damaged foodgrain has no published per-litre footprint and contributes nothing here, so the total is a floor. Distillery-stage water is a few litres per litre and is counted separately.
| Quantity | Value |
|---|---|
| Blending rate | 20% |
| Grain share of ethanol | 65% |
| Cane routed via B-heavy molasses | 35% |
| Cane routed via direct juice | 60% |
| Cane routed via C-heavy molasses | 5% |
| Gross sugar production | 306 LMT |
| Ethanol required | 1,016 crore L |
| — from cane | 356 crore L |
| — from grain | 660 crore L |
| Sugar forgone | 40.7 LMT |
| Closing stock | 32.8 LMT |
| Comfortable stock norm | 47.5 LMT |
| Import need | 14.7 LMT |
| Price direction | Strong upward pressure |
| Foreign exchange saved | ₹40,030 – ₹51,308 crore |
| Crude substituted | 64 – 82 lakh MT |
| CO₂ avoided (official basis) | 193 – 248 lakh MT |
| Irrigation water, total | 51,597 billion L |
| — from cane | 10,668 billion L |
| — from grain | 40,929 billion L |
| Distillery-stage water | 51 billion L |
Linear coefficients. Real yields vary by recovery rate, region and season; the model holds them fixed.
No market response. Prices, planting and imports would all react in ways arithmetic cannot capture, and hoarding and stock limits move price sharply.
It does not match the season exactly. At the current settings the model returns about 41 LMT of sugar forgone against a reported 30–34 LMT, because it applies the published first-half feedstock mix to a full year. That gap is a fair measure of how rough the arithmetic is.
Not a policy tool. Use it to build intuition about magnitudes, then read the sources.