The Centre has agreed to increase Bihar’s ethanol quota and remove the existing cap, offering relief to the state’s struggling ethanol sector. The announcement was made by Bihar Industries Minister Dilip Jaiswal, who said an official order will be issued soon, Hindustan reported.
The decision comes at a time when Bihar’s ethanol industry has been facing challenges due to reduced allocations. The state has around 15 ethanol plants with a combined production capacity of nearly 50 crore litres annually. However, the Centre had earlier set the quota at 38–40 crore litres, which was later reduced to 30 crore litres and further to around 18–20 crore litres.
This sharp cut led to a decline of nearly 45–55% in allocation, forcing ethanol plants to scale down production, even as some other states received allocations close to their full capacity.
Industry stakeholders say the cap on allocation had limited production despite adequate capacity. With the proposed removal of the cap and increase in quota, ethanol output in Bihar is expected to rise, improving the overall viability of ethanol plants in the state.
