Old units vs new entrants: Divide within grain-based ethanol distilleries
The Grain Ethanol Manufacturers Association (GEMA) has alleged that oil marketing companies (OMCs) favoured new entrants in deficit zones while sidelining existing units with surplus capacity in the latest ethanol tender. Despite OMCs allocating 72% of supplies to grain-based distilleries, GEMA warned the imbalance threatens hundreds of operational units.
A grain-based ethanol producers’ association has alleged that the oil marketing companies (OMCs) while placing supply order of the bio fuel have favoured new entrants in deficit zones, sidelining operational units with surplus capacity. The allegation, despite the OMCs allocating 72 per cent of the total quantity for the grain-based distilleries (as against 28 per cent for sugarcane-based units), has brought to fore the larger issue of how to address excess capacity than requirement, experts said.
In the recent tender by OMCs for supply of 1,050 crore litres of ethanol during Ethanol Supply Year (ESY) 2025–26, beginning November, the distillers had offered to supply 1,776 crore litres. But, the OMCs on October 18 announced to buy only 1,048 crore litres — 288.52 crore litres from sugar-based units and 759.75 crore litres from grain-based distilleries.
A serious imbalance in the ethanol procurement process is threatening the viability of hundreds of existing distilleries, Grain Ethanol Manufacturer’s Association (GEMA) said in a statement.
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Source : The Hindu Business line
