Ethyl alcohol is one of the co- products of the sugar industry. It is either made directly from sugarcane or from Molasses, which still contain some sugar, but this sugar cannot be extracted using current technologies. These Molasses are fermented with yeast to give ethyl alcohol. The mixture is then distilled to separate the alcohol from the mixture. Thus separated alcohol is about 95% pure and finds uses in pharmaceuticals, potable uses, industrial uses, and it can be further purified to about 99.5% purity to give Fuel Ethanol

SSL has three fuel ethanol plants having an aggregate capacity of 180 KLD. The technologically advanced ethanol plants are fully automated and employ the new generation molecular de-hydration sieve process. These plants have the option to produce ENA with minor modifications, if desired. The fuel ethanol is supplied to petroleum marketing companies in India.

The ethanol-blending program announced by the Government of India in December 2002 has opened an additional revenue stream for the sugar industry in India. Currently, only 5% ethanol-blending of fuel is mandated by the central government in entire country (other than North Eastern States), which would be increased to 10% from October, 2008. This presents a large potential demand for ethanol in India

The Ministry of Petroleum has estimated demand for ethanol-blended fuel to be approximately 1.2 billion litres at 10% blending in the year 2008-09.Presently, at 5% blending the ethanol demand is estimated at 600 mn ltr per annum.

Various Governments are providing incentives to expand Ethanol production and use. Brazil and United States use large quantities of Ethanol as a fuel. Some Canadian provinces promote Ethanol use as a fuel by offering subsidies of up to 45 cents per gallon of Ethanol. In France, Ethanol is produced from grapes that are of inferior quality for wine production. Prompted by the increase in oil prices in the 1970s, Brazil introduced a program to produce Ethanol for use in automobiles in order to reduce oil imports. Brazilian Ethanol is made from sugar cane. Pure Ethanol (100% Ethanol) is used in approximately 40 percent of the cars in Brazil. These cars are known as Flex Fuel cars since they provide an option of using petrol or Fuel Ethanol or both in any proportion. The remaining vehicles use blends upto 24 percent Ethanol with 76 percent gasoline. Brazil consumes nearly 4 billion gallons of Ethanol annually. In addition to consumption, Brazil also exports Ethanol to other countries.

Brazil and the United States are the largest ethanol producers, accounting for roughly 38% and 29% of the world market, respectively. In the United States , over 3.6 billion gallons of ethanol are blended with gasoline every year. On January 31, 2006 in his policy statement the US President recognized the future of ethanol as not only a blending component, but as a mixture of 85% ethanol and 15% gasoline.

The SSL has two Fuel ethanol plants having an aggregate capacity of 120 KLD. This will further go up to 180 KLD by March 2007 with the commencement of Brijnathpur Distillery. The technologically advanced ethanol plants are fully automated and employ the new generation molecular de-hydration sieve process. These plants have the optionalty to produce ENA with minor modifications, if desired, meeting the international standards. The Fuel Ethanol is to be supplied to petroleum companies in India.