The Indian Government has been promoting blending of ethanol in petrol under the Ethanol Blended Petrol (EBP) Programme wherein Public Sector Oil Marketing Companies (OMCs) sell ethanol blended with petrol. Under Ethanol Blended Petrol (EBP) Programme, ethanol blending in petrol has increased from 38 crore litres in Ethanol Supply Year (ESY) 2013-14 to more than 1000 crore litres in ESY 2024-25, thereby achieving an average blending of 19.24% ethanol in Petrol during ESY 2024-25. During the month of October, 2025, Ethanol blending of 19.97% has been achieved.
Suresh Gopi, Minister of State for Petroleum and Natural Gas, informed the Rajya Sabha about the positive impact of ethanol blending in India on farmers and the economy. He said, “EBP Programme has resulted in expeditious payment to farmers to a tune of over Rs. 1,36,300 crores from Ethanol Supply Year (ESY) 2014-15 up to October 2025, besides savings of more than Rs. 1,55,000 crore of foreign exchange, net CO2 reduction of approximately 790 lakh metric tonne and substitution of more than 260 lakh metric tonnes of crude oil.”
In order to ensure consistent availability of feedstock and infrastructure for ethanol production in India to achieve 20% Ethanol blending target by the ESY 2025-26 under EBP Programme, Government have taken several steps to promote ethanol production in India which inter-alia includes expansion of feedstock for Ethanol production, administered price mechanism for Ethanol procurement under the EBP Programme, lowered GST rate to 5% for Ethanol for EBP Programme, introduction of various Ethanol Interest Subvention Schemes (EISS) during 2018-22, a dedicated subvention scheme for Cooperative Sugar Mills to convert existing sugarcane-based distilleries into multi- feedstock plants for ethanol production from molasses as well as grains, signing of 233 Long Term Offtake Agreements (LTOAs) between OMCs and Dedicated Ethanol Plants which has increased the country’s annual ethanol distillation capacity to more than 1950 crore litres, approval by Government for allocation of 52 Lakh Metric Tonne (LMT) of surplus Food Corporation of India (FCI) rice for ethanol production, each for the ESY 2024-25 (from 1st November 2024 to 31st October 2025) and ESY 2025-26, diversion of 40 LMT of sugar for ethanol production for the ESY 2024-25 and unrestricted production of ethanol from sugarcane juice/sugar syrup, B-Heavy Molasses as well as C-Heavy Molasses for ESY 2025-26.
Further steps include the notification of the “Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana” to provide financial assistance for setting up Advanced Biofuels projects in the country using lignocellulosic biomass and other renewable feedstock, multimodal transportation of ethanol to enhance availability of ethanol and increasing ethanol storage capacity along with other allied infrastructure for handling of higher blends of ethanol.
