India is making significant progress in the ethanol sector, with production and blending levels increasing year after year, alongside growing production capacity. This momentum is not only transforming the country’s energy landscape but also driving economic development and fostering sustainable rural growth.
As of June 30, 2025, India’s annual ethanol production capacity stands at 1,822 crore litres, supported by 499 distilleries during the Ethanol Supply Year (ESY) 2024–25, according to the government data.
Maharashtra leads in ethanol production capacity with 396 crore litres, followed by Uttar Pradesh with 331 crore litres and Karnataka with 270 crore litres.
The state-wise details of ethanol distilleries, annual production capacity and quantity of ethanol supplied by distilleries to Oil Marketing Companies (OMCs) during Ethanol Supply Years (ESYs) 2021-22, 2022-23, 2023-24 and the current ESY 2024-25 are below:
(Data source:Ministry of Consumer Affairs, Food and Public Distribution)
Quantity of ethanol supplied to OMCs by distilleries to the States/UTs having no ethanol plants during ESYs 2021-22, 2022-23, 2023-24 and the current ESY 2024-25 are below :
(Data source:Ministry of Consumer Affairs, Food and Public Distribution)
To boost ethanol production and achieve the 20% ethanol blending target by ESY 2025–26 under the Ethanol Blended Petrol (EBP) Programme, the Government has undertaken several initiatives. These include:
-Expansion of feedstock options for ethanol production
-An administered pricing mechanism for ethanol procurement under the EBP Programme
-Reduction of GST on ethanol for the EBP Programme to 5%
-Introduction of various Ethanol Interest Subvention Schemes (EISS) from 2018 to 2022
-A dedicated subvention scheme for cooperative sugar mills to convert existing sugarcane-based distilleries into multi-feedstock plants, enabling production from both molasses and grains
-Long-Term Offtake Agreements (LTOAs) between OMCs and dedicated ethanol plants
-Promotion of multimodal transportation of ethanol to enhance availability
-Increased storage capacity and allied infrastructure to handle higher ethanol blends
-Notification of the “Pradhan Mantri Ji-VAN (Jaiv Indhan–Vatavaran Anukul Fasal Awashesh Nivaran)” scheme in 2019, amended in 2024, to provide financial support for setting up advanced biofuel projects using lignocellulosic biomass and other renewable feedstocks.
