As India seeks energy independence, booze may be a hurdle in the way

India, the world’s fastest growing guzzler of oil, is seeking to reduce its addiction to imports by using more sugar cane ethanol as fuel — but a mandate to supply molasses to the liquor industry in the top producing state is threatening to derail those plans.

In Uttar Pradesh state in northern India, there is a local government order requiring sugar mills to provide fixed amounts of molasses, a product of the refining process, to alcoholic drinks manufacturers at rates well below market levels, which means less is available to turn into ethanol for powering cars.

Asia’s third-biggest economy would like to boost the amount of ethanol in gasoline to 20% in a decade from 6% now to cut its dependence on foreign oil, which is currently more than 80%. India vies with Brazil as the world’s top sugar producer, and has seen how its rival has run a program for decades to use huge amounts of ethanol in fuel, replacing oil and supporting sugar prices.