Ethanol surplus looms over India’s sugar mills as E20 milestone meets capacity glut
India achieved E20 ethanol blending ahead of schedule, but sugar mills face a looming ethanol surplus as production capacity nears 1,990 crore litres against demand of about 1,050 crore litres. Reduced allocations, storage constraints and stagnant prices threaten the sector despite rising sugarcane output.
India has achieved a landmark by hitting 20 per cent ethanol blending with petrol in November 2025, months ahead of the national target.
Yet the ethanol segment of the sugar industry faces a brewing crisis: massive surplus production capacity, reduced sugar-based allocations, storage bottlenecks, and stagnant procurement prices amid surging sugarcane output.
The country’s ethanol distillation capacity stands at approximately 1,990 crore litres as of November 2025, according to the Department of Food and Public Distribution (DFPD). This far exceeds the current demand of around 1,050 crore litres for the Ethanol Supply Year (ESY) 2025-26 (November 2025–October 2026).
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Source : The Hindu Business line
