Haryana : India’s first 2G ethanol plant at Panipat costs ₹984 Crore, Government tells Lok Sabha
Indian Oil Corporation Limited’s 2G ethanol plant at Panipat, built with Praj Industries tech, cost ₹984 crore and operates at ~62% capacity. Backed by PM JI-VAN Yojana India, it marks India’s push toward advanced biofuels despite initial technical challenges.
The Minister of Petroleum and Natural Gas responded in the Lok Sabha to a question regarding the actual capital cost of the 2G ethanol plant established at the Indian Oil Corporation Limited (IOCL) Panipat Refinery based on Praj Industries technology.
In the reply, the Minister said that the Government have notified the “Pradhan Mantri JI-VAN (Jaiv Indhan – Vatavaran Anukool fasal awashesh Nivaran) Yojana” 2019, amended in 2024, to provide financial assistance for setting up Advanced Biofuels projects in the country using lignocellulosic biomass and other renewable feedstock.
Under this scheme, the 2G commercial Ethanol Plant set up by Indian Oil Corporation Limited (IOCL) at Panipat (Haryana) commenced commercial production on 11.11.2023.
The approved capital cost of the project is Rs. 909 crore ±10%, while the cumulative expenditure incurred by IOCL stands at Rs 984 crore. The plant has an installed capacity of 100 Kilo Litre Per Day (KLPD) of ethanol production.
The 2G ethanol plant is the first of its kind installed in India. The variability of straw quality in terms of moisture and silica content affects the downstream treatment section and creates associated mechanical issues.
IOCL is continuously working in close coordination with the technology provider, M/s Praj Industries, to resolve these issues in the plant. In December 2025, the plant operated at 62% of its design capacity after carrying out recent modifications during the period November-December 2025 to address process and mechanical challenges.
As experience of ongoing and executed projects is gained, these plants will stabilise. 2G ethanol Plant of commercial scale of other Public Sector Oil Companies have also been approved under the PM JI-VAN Yojana. These are (i) 185 KLPD bamboo-based 2G
ethanol plant at Numaligarh, Assam, by Numaligarh Refinery Limited through its joint venture company, Assam Bio Ethanol Private Limited (ABEPL), inaugurated in September, 2025,
(ii) a 100 KLPD paddy-straw-based 2G ethanol plant at Bargarh, Odisha, by Bharat Petroleum Corporation Limited (BPCL) and (iii) another 100 KLPD paddy-straw-based 2G ethanol plant at Bathinda, Punjab, by Hindustan Petroleum Corporation Limited (HPCL).
Indian Oil Corporation Limited (IOCL) has deducted Rs. 2.84 crore under Price
Reduction Schedule (PRS) as per the Contract against various contractors and equipment
suppliers of their 2G ethanol Plant at Panipat for the delay in delivery and execution. IOCL has also withheld Rs. 5.25 crore of the total license fee of Rs. 10.5 crore payable to the technology provider, as the successful completion of the Performance Guarantee Test Run of the plant has not been met as per the terms of the agreement. In addition, modifications implemented by Licensor cost Rs. 9.44 crore has been done free of cost.
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Source : Chinimandi
