Ethanol manufacturing units in Bihar are facing mounting operational challenges due to reduced allocation of ethanol supply, prompting industry stakeholders to urge the government to increase allocation to enable plants to run at full capacity.
According to ethanol producers, lower-than-required ethanol offtake has pushed plants in the state to operate well below their installed capacity, raising concerns over financial viability and potential shutdowns.
Bihar Industries Minister Dilip Jaiswal has acknowledged the seriousness of the issue and expressed concern over the difficulties faced by ethanol producers in the state. “Ethanol plants are on the verge of shutdown. Due to low ethanol supply allocation, these units are facing significant challenges,” Jaiswal said while speaking to Aaj Tak. “If ethanol plants shut down, it will have a direct impact on employment.”
The minister added that the state government is exploring measures to increase ethanol consumption and ensure the sustainability of existing plants. “We are taking steps to address the issue. I will soon visit Delhi and discuss the challenges faced by ethanol producers with the concerned departments,” he said.
Recently, a delegation of ethanol industry representatives from Bihar, led by CA Kunal Kishore, Founder–Director of InvestAid India and Secretary General of the Bihar Ethanol Association, recently met the Union Petroleum Secretary, Ministry of Petroleum and Natural Gas, Government of India, to raise concerns over ethanol allocation under the Ethanol Supply Year (ESY) 2025–26.
The delegation highlighted a significant shortfall in ethanol allocation to Bihar-based distilleries, despite substantial investments made by the sector, established operational capacities, and long-term commitments undertaken to support the national Ethanol Blended Petrol (EBP) Programme. Industry members emphasized that the current allocation levels could adversely impact plant viability and slow the momentum built by Bihar as an emerging ethanol-producing hub. The delegation underscored the need for equitable consideration of Bihar’s ethanol ecosystem, noting that policy support and timely allocations are key for sustaining investor confidence and achieving India’s broader energy security and biofuel goals.
The OMCs have allocated around 1,048 crore litres of ethanol against 1,776 crore litres of offers submitted by manufacturers across the country for ESY 2025–26 (Cycle 1). OMCs had invited tenders for the supply of 1,050 crore litres of ethanol for ESY 2025–26.
In the allocation, maize holds the largest share at 45.68 per cent (around 478.9 crore litres), followed by FCI rice at 22.25 per cent (around 233.3 crore litres), sugarcane juice at 15.82 per cent (around 165.9 crore litres), B-heavy molasses at 10.54 per cent (around 110.5 crore litres), damaged food grains at 4.54 per cent (around 47.6 crore litres), and C-heavy molasses at 1.16 per cent (around 12.2 crore litres).
Currently, India’s total ethanol production capacity as of November 2025 is about 1,990 crore litres, and the industry is calling for an increase in ethanol blending beyond 20 per cent, stating that capacities are underutilised
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