Charlotte Morton OBE, Chief Executive, World Biogas Association, considers how carbon capture can deliver a more stable and secure future for the industry 

India’s sugar industry is entering a period of change, a period of structural transformation driven by hard economics, policy and technological advances. For decades, the sector has been defined by its ability to produce sugar efficiently while supporting more than 50 million livelihoods across rural India. More recently, mills have started to diversify into ethanol and renewable power, strengthening both revenues and the country’s energy security.

The next phase of evolution will be different. Success will depend less on producing greater volumes of sugar and more on extracting maximum value from every tonne of cane – and from every tonne of carbon emissions avoided.

Climate change, evolving energy markets and decarbonisation are fundamentally reshaping the economics of agriculture and industry. As a founding member of the Global Biofuels Alliance, India has recognised that low-carbon fuels will play a critical role in future economic growth. The opportunity now is to ensure that India’s sugar industry captures the full value of that transition.

Biogas is central to this evolution. But its greatest potential may lie not simply in producing renewable gas (compressed biogas (CBG)), but in creating verified environmental value that can participate in domestic and international carbon markets.

A changing operating environment demands new business models

The traditional economics of sugar production are becoming increasingly uncertain. Climate variability is affecting cane yields across major producing regions. Higher temperatures, changing rainfall patterns and more frequent extreme weather events are increasing pressure on feedstock availability.

Government intervention to protect farmers and domestic consumers remains essential but also introduces greater uncertainty around cane pricing, exports and market access. At the same time, changing economics for ethanol production demonstrate that diversification alone does not eliminate volatility. These are structural rather than cyclical pressures.

For mill operators, profitability will increasingly depend on reducing exposure to commodity cycles and developing more diversified sources of revenue. In other words, resilience is becoming as important as productivity.

The emergence of the integrated biorefinery

This shift is already changing how leading sugar producers think about their businesses. Rather than viewing sugar as the primary product and everything else as a by-product,

progressive mills increasingly regard the entire cane stream as a portfolio of valuable resources. Sugar, ethanol, alcohol, renewable electricity, compressed biogas (CBG), biofertilisers and sustainable aviation fuel feedstocks all contribute to value creation. Biogas occupies a particularly important position within this model.

Organic residues including press mud and spent wash, once viewed primarily as costly waste management challenges, become feedstocks for renewable gas production. The process generates clean energy, reduces methane emissions and produces digestate that can replace synthetic fertilisers while improving soil health.

The result is a more circular and resource-efficient business model that creates multiple revenue streams from the same agricultural input. Importantly, it also creates measurable environmental outcomes.

The next value pool is carbon

Globally, the bioeconomy is evolving beyond renewable fuels alone. Increasingly, markets reward verified emissions reductions alongside physical products. Carbon intensity is becoming a competitive differentiator, with governments, investors and customers placing greater value on demonstrable environmental performance. This changes the investment case for biogas.

Every tonne of methane captured, every unit of renewable gas replacing fossil fuels and every reduction in fertiliser-related emissions represents not only an environmental benefit but also a potential economic asset – provided those reductions can be measured, verified and certified to recognised standards. For India’s sugar industry, this represents a significant opportunity.

Today, most investment decisions focus on the commercial value of sugar, ethanol or biogas. Tomorrow, an increasing proportion of project returns may come from the environmental attributes associated with those products. The next generation of sugar mills will therefore compete on both production efficiency and carbon efficiency.

Regulation and certification will determine market growth

Technology is no longer the principal constraint. Anaerobic digestion is well understood. Biogas upgrading technologies are commercially proven. As is carbon capture technology in the production of compressed biogas. Financing is becoming more accessible through central and state government support, particularly as cooperative mills receive greater policy attention.

The greater challenge is establishing market confidence. International carbon markets depend on trust. Investors and buyers require assurance that emissions reductions are genuine, additional, permanent and independently verified. Without common methodologies, certification systems and transparent monitoring, environmental benefits remain difficult to value consistently.

India therefore has an opportunity to move beyond project incentives towards market architecture. Developing nationally standardised protocols for measuring greenhouse gas reductions from sugar mill biogas projects would create consistency across the sector.

Aligning these methodologies with internationally recognised carbon accounting frameworks would improve compatibility with global voluntary carbon markets and emerging compliance mechanisms. Equally important is the development of robust certification systems that provide traceability from feedstock through to renewable gas production and associated emissions reductions.

Standardised digital reporting, independent verification and transparent carbon accounting would reduce transaction costs while increasing investor confidence. Such measures would not simply improve environmental governance; they would create the conditions necessary for carbon to become a recognised revenue stream.

Lessons from Brazil

Brazil demonstrates what becomes possible when regulation, markets and technology evolve together. Its sugar industry has developed into one of the world’s most sophisticated biofuel sectors, supported by policies that reward lower-carbon production through lifecycle carbon intensity. Rather than subsidising production indefinitely, the regulatory framework creates ongoing commercial incentives for continuous environmental improvement.

India’s circumstances are different. Smallholder farmers, cooperative ownership structures and regional diversity require policy solutions tailored to Indian conditions. Replicating Brazil’s institutional model would neither be practical nor desirable.

The underlying principle, however, remains highly relevant. Environmental performance acquires economic value only when it is measured consistently, certified credibly and recognised by the market. India has the opportunity to build a framework that reflects its own agricultural landscape while remaining compatible with international standards.

Building the next phase of India’s bioeconomy

The future competitiveness of India’s sugar industry will depend on more than expanding ethanol production or increasing renewable energy capacity. It will depend on creating integrated biorefineries capable of producing food, fuels, renewable gas, bio-based products and verified carbon reductions from every tonne of cane.

Many of the essential ingredients already exist. Government policy supports biofuels. Investment in compressed biogas is accelerating. Technology is mature and industry capability continues to grow. The next frontier is institutional.

Standardised regulation, internationally aligned certification and credible carbon accounting can transform emissions reductions from an environmental outcome into a tradeable economic asset. Doing so would attract investment, strengthen rural economies and enable Indian producers to participate more fully in rapidly expanding global carbon markets.

India has already demonstrated leadership in advancing the global bioeconomy. By establishing world-class regulatory and certification frameworks for low-carbon fuels and carbon capture within the sugar sector, it has an opportunity not only to follow international best practice, but to help define it.

The evolution from sugar mill to integrated biorefinery is already underway. The next step is ensuring that every molecule of renewable gas – and every tonne of carbon avoided – can realise its full economic value.

The transition from sugar mill to integrated biorefinery is one of the most important opportunities in India’s bioeconomy. Join us at the World Biogas Association INDIA Congress on 8-9 October 2026 in New Delhi  to explore how biomethane, ethanol, biofertilisers, renewable CO₂ and other bioproducts can work together to unlock greater value from sugar and distillery residues, strengthen competitiveness and accelerate the growth of a world-leading bioeconomy.