India is steadily advancing in the ethanol sector, with both production and blending levels rising each year and manufacturing capacity expanding. This progress is reshaping the nation’s energy landscape while boosting economic development and promoting sustainable growth in rural areas.
According to the Department of Food and Public Distribution (DFPD), India’s total ethanol production capacity as of November 2025 is about 1,990 crore litres, of which Uttar Pradesh contributes 236 crore litres. This information was shared in the Rajya Sabha by Minister of State for Petroleum and Natural Gas Suresh Gopi while responding to a question on the country’s total ethanol production capacity and the contribution from Uttar Pradesh, a major sugarcane-producing State.
The Government has been promoting the blending of ethanol with petrol under the Ethanol Blended Petrol (EBP) Programme. The National Policy on Biofuels – 2018, as amended in 2022, inter-alia advanced the target of 20% blending of ethanol in petrol from 2030 to Ethanol Supply Year 2025-26 (ESY- 1st November, 2025 to 31st October, 2026). Public Sector Oil Marketing Companies (OMCs) achieved the target of 10% ethanol blending in petrol in June 2022 i.e. five months ahead of the target during ESY 2021-22, 12.06% in ESY 2022-23 and 14.60% in ESY 2023-24. During ESY 2024-25, more than 1000 crore litres of ethanol have been blended thereby achieving an average blending of 19.24% ethanol in Petrol. In the month of October, 2025, ethanol blending of 19.97% has been achieved.
Minister said, “To incentivize the use of non-food biomass for second generation ethanol production throughout the country, Government has launched “Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana” 2019, amended in 2024, with the objectives to establish advanced biofuels projects in the country using lignocellulosic biomass and other renewable feedstocks. This scheme envisages setting up of commercial Advanced Biofuel Projects and demonstration scale Advanced Biofuel Projects for improving commercial viability as well as promoting R&D for development and adoption of technologies in the field of production of advanced biofuels. Under the PM JI-VAN Yojana, the maximum financial assistance of Rs.150 crore per project for commercial scale projects and Rs. 15 crore per project for demonstration scale projects have been prescribed.”
“Procurement prices of ethanol have been increasing over the years. For the ESY 2024-25, the average procurement cost of ethanol stands at Rs. 71.55 per litre (inclusive of transportation and GST), which is higher than the cost of refined petrol. The price of petrol (including ethanol blended petrol) has been market determined with effect from 26.06.2010. Since then, OMCs take appropriate decisions on pricing on petrol based on inter-alia international product prices, domestic market conditions etc,” he further added.
