More Stories

Informist, Friday, Apr. 11, 2025

NEW DELHI – About 16.5 million tonnes of grains will be needed annually from 2025 to make ethanol under the government's Ethanol Blended Petrol Programme, the Grain Ethanol Manufacturers' Association said in a report. The grains sold to distilleries will put INR 350 billion in the hands of farmers, it added.

Ethanol is made from starch-containing feedstock--grains and molasses--and used to blend with petrol to reduce fossil fuel imports and cut carbon emissions. "The government had envisioned a 50-50 split between grain and sugar; however, grains ethanol has exceeded expectations," the report said. "In ESY (ethanol supply year) 2023-24 grain overtook sugar as the major feedstock and within grain, maize has become the highest contributor," it added.

However, stagnant ethanol procurement rates, demand for maize from the poultry and starch industry, and declining margins from by-products are challenging ethanol production from maize. Citing surplus rice production, the association has urged the government to ensure supply of rice from Food Corp. of India to make ethanol.

India is a net exporter of rice. In 2023-24 (Apr-Mar), the country net exported 16.4 million tonnes of rice, according to the report. "This is an indicator that production of rice exceeds its consumption, and this rice is lying dormant in FCI warehouses across India, beyond the mandated surplus," it added.

The government hopes to reach 30% blending by 2030, which will require 17.35 billion litres of ethanol, the report said. This would result in reducing 34.7 million tonnes of carbon emissions annually. India aims to reduce carbon emissions by 50% by 2030 and achieve net zero by 2070.

"India has rapidly scaled its ethanol blending efforts, increasing from over 10% in 2022 to 19.7% in February 2025," the report said. In 2024, all state-run oil marketing companies were dispensing ethanol-blended petrol at all the retail outlets, the report said.

The government estimates that at 20% blending, the savings in foreign exchange would be INR 450 billion annually. "Even if the blending rate continues at 20%, the savings that would accrue between 2025-2030 would be INR 2.25 lakh crores (INR 2.25 trillion)," the report said. Of this total savings, assuming the current 57% contribution of grain ethanol and the rest of molasses, foreign exchange savings from grain ethanol could total INR 1.28 trillion, report said.

The ethanol industry is expected to grow at a compound annual growth rate of 8.84% and reach INR 906 billion by 2029. In 2023, the industry was valued at INR 537 billion.  End

Reported by Afra Abubacker

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.