Guides · 1 Nov 2026

Tracking bagasse, molasses, ethanol and cogeneration in your ERP

Treat each by-product as a stock item with its own opening balance, output, transfers, sales and closing balance, and tie those quantities to the daily mass balance. Then link the streams, so that each transfer of molasses to the distillery and bagasse to the boilers carries a measured quantity, a price basis and an approval.

One cane stream, several ledgers

All these streams start at the same mill. Government answers in Parliament have put bagasse at about 30 to 33% of cane crushed, molasses at about 4.2 to 4.5%, and press mud at about 3 to 5%. These are broad figures that vary by mill and season. Use your own mill balance, and treat a sudden shift as a reason to check your measurements.

Most mills sit on these numbers in separate places: the lab, the boiler house, the distillery office and the electricity meter. Each stream has its own outside reader, which is why the records need to agree.

Stream	Measured by	Key records	Who checks it
Bagasse	Mill balance, weighbridge for sales	Output, boiler use, sales, closing pile	Cost accounts, tax auditor
Molasses	Tank dip, weighbridge	Output, tank stock, transfers, permits, sales	State molasses and excise authorities
Ethanol	Bulk and absolute litres	Batches, distillation runs, tanks, dispatch	State excise, oil companies
Spent wash	Flow and tank level	Generation, treatment, disposal route	Pollution control board
Power	Generation and export meters	Steam, generation, own use, export, invoices	Utility under the PPA

Bagasse

Bagasse is easy to treat as free fuel, and that distorts your costing. Cost accountants have argued that its rising value justifies treating it as a joint product, and a September 2021 paper in The Management Accountant sets out four methods for pricing transfers to a cogeneration plant.

The transfer price has tax consequences too. In one reported dispute, a tribunal accepted a mill's price to its power division because it rested on third-party quotations. Pick a method with your auditor, document it, and use it each year.

Record bagasse from the mill balance, boiler use, sales and any bought-in fuel. Reconcile the closing pile against a measured survey at regular intervals.

Molasses

Molasses is controlled at state level, and the rules differ. Uttar Pradesh has the Sheera Niyantran Adhiniyam, 1964, and Maharashtra has the Molasses (Control) Act, 1956, under which breaching a permit condition is an offence. Check the current rules in your state.

Your system should hold stock by tank, with a permit number, vehicle and quantity on every load. Keep B-heavy and C-heavy molasses apart. A USDA conversion table uses 300 litres of ethanol per tonne of B-heavy and 217 litres per tonne of C-heavy. Use these for planning only, since your own yield depends on fermentable sugars. Drawing B-heavy also takes sucrose out of the boiling house, so read it together with your sugar recovery.

Ethanol and spent wash

Follow each batch from molasses drawn through fermentation, distillation, tank and dispatch, in both bulk and absolute litres. Tag ethanol by feedstock, because oil companies have priced it separately for juice, B-heavy and C-heavy.

State excise control runs through this stream. In 2023 the Bombay High Court held that ethanol is rectified spirit, whether made from molasses or cane juice. Get your state's register formats from your excise officer before you configure any system.

CPCB directions of 2015 mandated zero liquid discharge for molasses distilleries, and state boards apply this through consent conditions. Record spent wash generated, stored and disposed of by route, and compare storage against your consent limits.

Cogeneration

Power goes first to the plant's own needs, and the surplus goes to the grid. Tariffs vary by state, and many mills stop generating in the off-season because rates are unattractive.

Record daily steam, bagasse burnt, units generated, own use and units exported. Match your export figure to the utility's meter reading before raising the invoice under the PPA.

What to ask of any ERP

Does each stream have its own stock ledger with an opening and closing balance?
Do transfers between units post on both sides?
Can it hold molasses by tank and grade?
Does each molasses load carry a permit reference?
Can it record bulk and absolute litres?
Can it produce your state's excise registers in the required format?
Can it record daily power meter readings and bill against a PPA?
Are approved records locked, with corrections made by reversal?

Where SugarOS stands

SugarOS records by-product output from the shift log, and handles molasses and bagasse sales. Its distillery, excise, spent wash and cogeneration modules connect to real sensors and meters at each mill.

Frequently asked questions

How do we measure bagasse without weighing all of it?

Most mills calculate output from the mill balance, since bagasse moves to the boilers by carrier. Weigh what is sold, and check the closing pile by regular survey.

Why keep B-heavy and C-heavy molasses separate?

They differ in fermentable sugar, ethanol yield and price basis. Mixing them in one stock line makes yield analysis unreliable and hides the sugar given up by drawing B-heavy.

Is the bagasse sent to our own boiler a sale?

Inside one company it is normally an internal transfer. It still needs a recorded quantity and a price basis for unit-wise costing, and your auditor should review the treatment.

Can we run the distillery on a separate system?

Yes, and many mills do. You then need a controlled transfer of molasses, steam and power quantities between the systems, or the mass balance and costing will not tie.

Sources

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