Food Vs Fuel ‘Not Relevant’ In India’s Ethanol Push: GEMA
India’s ethanol push is not competing with food supply, says GEMA President CK Jain. He stressed that grain ethanol mainly uses surplus FCI rice and maize from marginal farmers, boosting rural incomes and energy security. With blending already at 19.6% and capacity for 2,000 crore litres, Jain urged higher blend targets, pricing reform, and GST on ethanol.
The longstanding debate of food versus fuel has “no relevance” in India’s ethanol context, according to CK Jain, President of the Grain Ethanol Manufacturers Association (GEMA). He said grain ethanol is primarily sourced from surplus stocks and maize grown by marginal farmers, positioning it as a tool for rural development and energy security rather than a threat to food availability.
“Food versus fuel is no challenge now. Whatever grain goes into ethanol is surplus. For example, FCI has more than 200 lakh tonnes of rice stock after PDS and emergency reserves. Only 52 lakh tonnes are issued for ethanol, often rice unfit for human consumption,” Jain told BW Businessworld.
Maize at the Centre of Ethanol Push
He underlined that since 2018, the government has shifted focus from damaged foodgrain and FCI rice towards maize-based ethanol. Today, about 70 per cent of grain ethanol comes from maize, a less water-intensive crop grown largely by small farmers.
“This programme is for farmers’ income and rural development. Plants are set up in remote areas, creating local jobs and a supply chain ecosystem. We are paying Rs 22 for maize today, compared to Rs 16–17 earlier — the benefit goes directly to farmers,” he said.
On Mileage and the E20 Debate
Responding to concerns that E20 fuel lowers vehicle mileage, Jain dismissed them as “sponsored narratives” by the petroleum lobby. “Yes, ethanol gives 1–2 per cent lower mileage, but the real drop in cities is due to red lights and congestion, not ethanol. My car engine has run fine for 10 years on ethanol blends,” he argued.
India has achieved an average blending rate of 20 per cent (19.6 per cent). Jain said the industry, with a built capacity of 2,000 crore litres, is ready to scale. He urged the government to draft a new roadmap beyond E20.
“We are requesting that the base petrol blending target be raised stepwise — 22, 25, 27 per cent. Brazil has 27 per cent base petrol but consumes 45 per cent ethanol because of flex-fuel vehicles. India needs to move in that direction if we want to save Rs 1 lakh crore annually in forex,” he said.
He added that OMCs and private players currently lift around 1,250 crore litres annually, while capacity has been built up to 2,000 crore litres. “What will happen with that? We have the raw material, we have the surplus grain, we have invested in capacity — now it is time to increase it.”
Policy Bottlenecks: Pricing and Taxes
Jain flagged ethanol pricing as a concern, citing high MSP-linked input costs and state VAT. “Ethanol attracts the same 30–33 per cent VAT as petrol. If converted to GST, ethanol will automatically become cheaper. The industry is efficient, but unless productivity rises and tax structures are revised, end prices will not fall,” he noted.
On second-generation (2G) ethanol from stubble, Jain was sceptical, calling it “unviable” due to high capex and opex. “There are better uses for stubble, like CBG or boiler fuel. 2G ethanol at Rs 200 a litre cannot compete with Rs 70 ethanol,” he said.
Jain added that GEMA’s “Makkah Gaon” campaign with seed companies and IIMR is focused on improving maize productivity and starch yield, which could lower ethanol costs and make farmers more competitive.
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Source : Business World
