If overcapacity is today’s reality, responsibility cannot rest entirely on the shoulders of entrepreneurs. It is the outcome of a clear national vision, strong policy signals, and a future-oriented programme led by the Government of India.
From day one, the Ethanol Blending Programme was never intended to stop at 20%. This level was only a checkpoint—to assess investor capability, feedstock availability, rural impact, and system readiness. Industry responded exactly as the policy framework
encouraged—by investing ahead of demand.
Blending was always projected to rise further. Higher Ethanol blends, Flex-Fuel Vehicles, and the *Brazil model—where ethanol replaces nearly 55% of petrol—*were consistently cited as the roadmap. Entrepreneurs invested in line with this long-term direction, not short-term tenders.
Unfounded social media narratives labelling blending as “adulteration” ignored scientific evidence and expert reports. While the programme itself has delivered outstanding results, such misinformation may have contributed to a pause at 20%. If so, the investments already made in national interest must also be factored in.
Ethanol blending is today India’s most successful pathway toward the Net-Zero 2070 goal.
In 2024-25 alone:
• ₹40,000 crore foreign exchange saved
• ₹50,000 crore injected into the rural economy
Rural India has witnessed real growth. Farmer incomes have risen. Employment has expanded. India remains a surplus grain nation, fully capable of supporting food and fuel together.
The need of the hour is demand expansion, not capacity contraction.
GEMA believes following urgent steps are required:
Increase the blending to the acceptable levels of existing vehicle crop
Accelerated rollout of Flex-Fuel Vehicles by providing concessional GST and PLI
Rapid development of ethanol dispensing infrastructure
Concessional GST / VAT rationalisation on Ethanol dispensation to make it competitively priced
With these measures, ethanol can help India save ₹2 lakh crore annually in foreign exchange against an oil import bill of ₹22 lakh crore.
The capacity exists.
The investment is made.
Now policy must unlock consumption
The author is President of Grain Ethanol Manufacturers Association (GEMA).
