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India's Ethanol Blending Target: Achieving 20% Ethanol in Petrol Ahead of Schedule

04-02-2025

05:33 AM

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India's Ethanol Blending Target: Achieving 20% Ethanol in Petrol Ahead of Schedule Blog Image

What’s in Today’s article?

  • India's Ethanol Blending Target Latest News
  • Sources of Ethanol Production
  • Role of Maize in Ethanol Production
  • Government Policy Initiatives
  • Economic and Environmental Impact of Ethanol Blending
  • Challenges and Future Outlook
  • Conclusion
  • India’s Ethanol Blending Policy FAQs

India's Ethanol Blending Target Latest News

  • India is on track to achieve 20% ethanol blending in petrol within the next two months, a milestone that was originally expected to be met in 2026. 
  • According to Union Minister Nitin Gadkari, the country will now produce 1,100 crore litres of fuel ethanol annually, supporting energy security, reducing oil imports, and benefiting farmers.
  • To meet this demand, the government is expanding ethanol production using sugar, rice, and maize, while increasing the capacity of distilleries.

Sources of Ethanol Production

  • The government plans to produce ethanol from multiple sources to ensure a stable supply. The key feedstocks include:
  • Sugar and Molasses – Expected to contribute 400 crore litres annually.
  • Food Corporation of India (FCI) Rice – Will provide 110 crore litres of ethanol.
  • Broken Rice and Maize – Estimated to supply around 400 crore litres.
  • With ethanol distillery capacity ramped up to 1,600 crore litres, the government is ensuring adequate production levels through subsidies, incentives, and infrastructure investments.

Role of Maize in Ethanol Production

  • Maize has emerged as a key ethanol feedstock, with increased cultivation and imports supporting the ethanol push.
  • Key Developments in Maize Production:
    • Maize imports surged in 2024, with India importing ₹100 crore worth of maize between April and June alone.
    • Maize cultivation expanded by 10%, with higher yields boosting supply.
    • Major maize-producing states include Karnataka, Madhya Pradesh, Maharashtra, Andhra Pradesh, Rajasthan, Bihar, and Uttar Pradesh.
    • The 2024-25 ethanol year is expected to yield 42 million tonnes of maize, with 9 million tonnes allocated to ethanol production.
  • Experts believe that higher maize cultivation will reduce import dependency in the future, ensuring a stable ethanol supply chain.

Government Policy Initiatives

  • The government has introduced policy reforms and incentives to support ethanol production:
  • Reduction in FCI Rice Price – Price lowered from ₹28/kg to ₹22.5/kg to make ethanol production more cost-effective.
  • Dual-Feed Distilleries – Sugar mills are modifying infrastructure to produce ethanol from both sugar and maize.
  • Financial Incentives – Ethanol producers benefit from subsidized loans, guaranteed procurement, and long-term contracts.
  • These measures are strengthening ethanol production and ensuring economic benefits for farmers.

Economic and Environmental Impact of Ethanol Blending

  • Reducing India’s Oil Import Bill - India imports ₹10.5 lakh crore worth of crude oil annually. Ethanol blending can save ₹6,000 crore per 100 crore litres of ethanol produced.
  • Boosting Farmer Incomes - With ethanol demand rising, farmers are shifting to maize cultivation, earning better returns than traditional crops.
  • Sustainable Fuel Alternative - Ethanol is a clean fuel that reduces carbon emissions, contributing to India’s climate goals and energy security.

Challenges and Future Outlook

  • Impact on Food Security – Higher maize allocation to ethanol may affect poultry, livestock feed, and human consumption.
  • Need for Infrastructure Upgrades – More distilleries and supply chain improvements are needed to handle higher production.
  • Market Stability Concerns – Ensuring stable ethanol prices without affecting food prices remains a policy challenge.
  • Despite these concerns, experts believe that ethanol blending is a game-changer for India’s energy sector, promoting self-reliance and sustainability.

Conclusion

  • India’s 20% ethanol blending target marks a major milestone in its transition to sustainable energy sources. 
  • With a strong policy push, increased maize production, and expanded distilleries, the country is set to reduce oil imports, support farmers, and enhance energy security.
  • The future of ethanol in India depends on continued investment, technological advancements, and balancing food security with fuel needs. 
  • If executed well, India could become a global leader in biofuel production.

India’s Ethanol Blending Policy FAQs

Q1. What is India’s ethanol blending target?

Ans. India aims to achieve 20% ethanol blending in petrol, a goal now expected one year ahead of schedule.

Q2. How much ethanol does India need annually?

Ans. India requires 1,100 crore litres of ethanol per year to meet the 20% blending target.

Q3. What are the main sources of ethanol production in India?

Ans. Ethanol is produced from sugar, molasses, broken rice, FCI rice, and maize.

Q4. Why is maize important for ethanol production?

Ans. Maize is emerging as a key feedstock, with India increasing maize cultivation and imports to support ethanol demand.

Q5. How does ethanol blending benefit India’s economy?

Ans. Ethanol blending reduces oil imports, supports farmers, and lowers carbon emissions, making it a win-win policy for India.

Source: TH