Ethanol boost: Sugar mills/distilleries, including grain-based units, generate Rs 2 lakh crore revenue in 11 years
India’s ethanol production capacity has surged over fourfold in 11 years to 1,810 crore litres annually, driven by policy support. Ethanol blending in petrol rose from 1.53% in 2013 to 18.74% in 2024–25, saving ₹1.10 lakh crore in foreign exchange. The Ethanol Blended Petrol Programme aims for 20% blending by 2025–26 to reduce oil imports and boost farmer income.
India’s ethanol production capacity has witnessed a surge under the Modi government, increasing more than fourfold over the last 11 years to reach 1,810 crore litres annually, driven by supportive policy measures, a senior official said.
Over the past 11 years, sugar mills/distilleries, including grain-based facilities, have generated nearly Rs. 2 lakh crore in revenue, with Rs. 1.22 lakh crore coming solely from sugarcane-based distilleries, reported PTI.
The increase in installed production capacity has pushed the ethanol blending rate with petrol to nearly 19%, up from just 1.53% in 2013. This shift has resulted in substantial foreign exchange savings, over Rs. 1.10 lakh crore—and provided economic benefits to both sugarcane and foodgrain farmers.
According to an official from the Department of Food and Public Distribution, India’s ethanol distillation capacity stood at only 421 crore litres in 2013. Today, it has reached 1,810 crore litres, thanks to key policy initiatives such as interest subsidies for setting up production facilities.
In the 2013–14 ethanol supply year (ESY), only 38 crore litres of ethanol were supplied to oil marketing companies (OMCs), resulting in a blending level of just 1.53%. By ESY 2023–24, fuel-grade ethanol production and supply to OMCs had increased more than 18-fold.
In ESY 2023–24, around 707 crore litres of ethanol were blended with petrol, achieving a 14.60% blending rate. As of May 25 in the ongoing ESY 2024–25, 548 crore litres have already been blended, with the blending rate rising to 18.74%.
Out of the total 1,810 crore litres of installed capacity, 816 crore litres are molasses-based, 136 crore litres are dual-feed capacity, and 858 crore litres come from grain-based production.
The Ethanol Blended Petrol (EBP) Programme was introduced to reduce dependency on crude oil imports, conserve foreign exchange, cut carbon emissions, and support the agricultural sector. The government is implementing this programme nationwide, with OMCs supplying ethanol-blended petrol to consumers.
The target under the EBP Programme is to achieve 20% ethanol blending with petrol by the ESY 2025–26. To meet this goal, the projected ethanol requirement for blending and other uses is about 1,350 crore litres.
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Source : Chinimandi
