New Delhi: India’s ethanol programme is set to enter a new phase, with the government exploring the use of ethanol as a household cooking fuel through dedicated dispensing stations, or “ethanol ATMs”, in a move aimed at creating new demand for the country’s expanding biofuel production.
The proposal, currently under discussion, envisages consumers purchasing ethanol in canisters from dedicated retail outlets for use in specially designed cooking stoves. If implemented, it would mark a major expansion of India’s biofuel strategy, which has largely focused on blending ethanol with petrol to reduce crude oil imports, according to a report by The Economic Times.
The initiative comes after India achieved nationwide 20% ethanol blending (E20) ahead of schedule, prompting policymakers to explore new applications for ethanol beyond transport fuels. Alongside cooking fuel, the government is also promoting ethanol use in sustainable aviation fuel (SAF), flex-fuel vehicles and export markets.
India’s ethanol blending programme has expanded rapidly over the past decade, with blending levels rising from around 1.5% in 2014-15 to 20%. Government estimates suggest the programme has saved more than Rs 1.4 lakh crore in foreign exchange while boosting farmer incomes and encouraging significant investments in distillation capacity.
Those investments, however, have also resulted in surplus production capacity. According to CareEdge Ratings, India’s installed ethanol production capacity has crossed 20 billion litres annually and is expected to reach nearly 24 billion litres during the current financial year. In comparison, the E20 blending programme requires around 11 billion litres annually, while the liquor, pharmaceutical and chemical sectors consume another 3-3.5 billion litres, leaving sizeable capacity available for new markets.
Industry experts believe the proposed ethanol ATM network could create a new retail ecosystem for biofuels while reducing dependence on imported liquefied petroleum gas (LPG). Commercial adoption, however, will depend on consumer acceptance, safety regulations and the availability of compatible cooking stoves.
India is also exploring ethanol exports to neighbouring countries such as Nepal, Bangladesh and Indonesia, where blending programmes are expanding but domestic production remains insufficient.
Another major growth opportunity is emerging in aviation. Earlier this year, the government approved a roadmap for blending Sustainable Aviation Fuel with conventional aviation turbine fuel, requiring 1% blending for international flights by 2027 and increasing the mandate to 5% by 2030. Ethanol is one of the recognised feedstocks for producing SAF through the alcohol-to-jet pathway, and India’s first ethanol-to-jet fuel plant is being developed near Visakhapatnam by NTPC Green Energy and GPS Renewables.
The government’s draft Corporate Average Fuel Efficiency (CAFE)-III norms have also proposed incentives for ethanol and other biofuels, signalling policy support for greater adoption of flex-fuel vehicles.
Industry observers say the focus of India’s ethanol policy is gradually shifting from achieving blending targets to expanding ethanol consumption across multiple sectors. As production capacity continues to rise, initiatives such as ethanol ATMs, aviation fuel, exports and flex-fuel mobility are expected to play a key role in absorbing future supplies and strengthening the country’s broader bioenergy strategy.
