The Indian Sugar and Bio-energy Manufacturers Association (ISMA) on Wednesday urged the Centre to undertake comprehensive GST rationalisation and provide targeted policy support across the biofuel and clean mobility ecosystem to reduce emissions, protect farmer livelihoods, cut crude oil imports, and accelerate India’s journey toward net zero.
The association has outlined a comprehensive 10-point blueprint aimed at revitalising the sugar sector by evolving it into a multi-vertical bio-energy hub. Key proposals include reducing the GST on flex-fuel vehicles (FFVs), ethanol fuels, and related equipment. Additionally, there is a call to align the tax treatment of hybrid electric vehicles with that of fully electric vehicles. This initiative seeks to promote sustainability and enhance the bio-energy landscape.
ISMA Director General Deepak Ballani cited that the measures can provide immediate carbon reductions using existing ethanol supplies, production capacity, and vehicle technologies without waiting for new infrastructure.
Suggestions consist of reducing GST on FFV two-wheelers and small cars to 5% to get cost parity with petrol vehicles, lessening GST on E85/E100 ethanol to 5% to ensure pump prices stay aligned with petrol, and lowering GST on ethanol-corresponding equipment to 5% to support sectoral growth.
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ISMA asked for Rs 200 crore in financial assistance to expand advanced biofuels like sustainable aviation fuel, bio-hydrogen, and isobutanol, which consists of dedicated funds for technology validation and a Rs 2,000 crore fund for the conversion of sugar mills into integrated bio-energy hubs.
The association sought 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.
