Indian Sugar and Bio-energy Manufacturers Association (ISMA) on Wednesday urged Centre to undertake comprehensive GST rationalisation and provide targeted policy support across the biofuel and clean mobility ecosystem to cut emissions, protect farmer livelihoods, reduce crude oil imports and accelerate India’s journey towards net zero.
Presenting a 10-point blueprint, the association proposed transforming the sugar sector into a multi-vertical bio-energy hub and lowering the GST on flex-fuel vehicles (FFVs), ethanol fuels and related equipment while aligning the tax treatment of hybrid electric vehicles with that of electric vehicles.
ISMA director general Deepak Ballani said the measures could deliver immediate carbon reductions using existing ethanol supplies, production capacity and vehicle technologies without waiting for new infrastructure.
Key recommendations include cutting GST on FFV two-wheelers and small cars to 5 per cent to achieve cost parity with petrol vehicles, reducing GST on E85/E100 ethanol to 5 per cent to ensure pump prices remain competitive with petrol and lowering GST on ethanol-related equipment to 5 per cent to support sectoral growth.
ISMA also sought Rs 200 crore financial support to expand advanced biofuels such as sustainable aviation fuel, bio-hydrogen and isobutanol, including dedicated funds for technology validation and Rs 2,000 crore fund for conversion of sugar mills into integrated bio-energy hubs.
The association further called for a national sustainable aviation fuel policy with fiscal incentives, creation of a Bharat biofuels alliance and viability gap funding for green hydrogen projects ahead of the Union Budget 2026–27.
