New Delhi: The Centre is preparing a policy framework to introduce ethanol as a household cooking fuel, aiming to utilise surplus ethanol production capacity, reduce dependence on imported liquefied petroleum gas (LPG) and strengthen the country’s energy security, according to industry executives.
The proposed policy, being drafted by the Ministry of Petroleum and Natural Gas, is expected to outline measures to develop the supply chain for ethanol-based cooking and may include financial incentives to encourage adoption. According to The Economic Times, the framework is likely to be finalised by September.
The initiative comes as India’s ethanol production capacity has expanded rapidly under the biofuel programme. A CareEdge Ratings report released in May estimated the country’s annual ethanol production capacity at more than 20 billion litres, with another 4 billion litres expected to be added during the current financial year.
Around 11 billion litres of ethanol are currently used annually under India’s E20 petrol blending programme, while the liquor, pharmaceutical and chemical industries consume another 3-3.5 billion litres, leaving an estimated 7 billion litres of surplus production capacity.
Industry executives said the government is evaluating subsidy options for ethanol cooking, including one-time capital support for ethanol stoves or recurring fiscal incentives to encourage household adoption.
State-run oil marketing companies (OMCs) are also participating in the discussions and have reportedly initiated research and development of ethanol-based cooking stoves. They are exploring partnerships and acquisitions of existing ethanol cooking technologies to accelerate commercial deployment.
As part of the proposed ecosystem, OMCs may install ethanol dispensing kiosks or automated teller machines (ATMs) at fuel stations, enabling consumers to purchase ethanol in canisters for use in household cooking.
The proposal has gained momentum following concerns over India’s dependence on imported LPG, particularly after recent geopolitical tensions in West Asia exposed vulnerabilities in global fuel supply chains. Much of India’s LPG imports continue to originate from Gulf countries and pass through the Strait of Hormuz.
To improve energy security, India has diversified its LPG sourcing and state-run oil companies are preparing strategic storage facilities capable of maintaining nearly 30 days of LPG supplies.
Industry officials also said India’s surplus ethanol production capacity could create export opportunities, with neighbouring countries such as Nepal and Bangladesh, as well as Indonesia, emerging as potential markets due to their expanding ethanol blending programmes and limited domestic production capacity.
A February report by the International Institute for Sustainable Development (IISD) estimated that a transition to electric cooking and biogas could save India more than ₹2 lakh crore in cumulative LPG subsidies by 2050. The proposed ethanol cooking policy is expected to complement these clean energy initiatives by providing an additional non-fossil fuel option for households.
