The Indian government has been actively promoting the blending of ethanol in petrol through the Ethanol Blended Petrol (EBP) Programme, under which Public Sector Oil Marketing Companies (OMCs) sell petrol mixed with ethanol. Since the inception of the programme, ethanol blending in petrol has grown significantly, from 38 crore litres in Ethanol Supply Year (ESY) 2013-14 to over 1,000 crore litres in ESY 2024-25, achieving an average ethanol blend of 19.24% in petrol during ESY 2024-25. In October 2025 alone, ethanol blending reached 19.97%.
Suresh Gopi, Minister of State for Petroleum and Natural Gas, highlighted the programme’s benefits in the Rajya Sabha, noting its positive impact on farmers and the economy. He stated, “The EBP Programme has enabled prompt payments to farmers amounting to over Rs. 1,36,300 crore from ESY 2014-15 up to October 2025, while also saving more than Rs. 1,55,000 crore in foreign exchange, reducing net CO2 emissions by approximately 790 lakh metric tonnes, and substituting over 260 lakh metric tonnes of crude oil.”
To ensure a consistent supply of feedstock and adequate infrastructure for ethanol production, aiming for the 20% ethanol blending target by ESY 2025-26, the government has implemented several measures. These include expanding feedstock for ethanol production, instituting an administered price mechanism for ethanol procurement under the EBP Programme, reducing the GST rate on ethanol for the programme to 5%, and launching multiple Ethanol Interest Subvention Schemes (EISS) between 2018-22. A dedicated subvention scheme was also introduced to help cooperative sugar mills convert sugarcane-based distilleries into multi-feedstock ethanol plants using molasses and grains.
Additionally, 233 Long-Term Offtake Agreements (LTOAs) have been signed between OMCs and Dedicated Ethanol Plants, increasing India’s annual ethanol distillation capacity to over 1,950 crore litres. The government has also approved the allocation of 52 Lakh Metric Tonnes (LMT) of surplus Food Corporation of India (FCI) rice for ethanol production in ESY 2024-25 and ESY 2025-26, diverted 40 LMT of sugar for ethanol production in ESY 2024-25, and allowed unrestricted production of ethanol from sugarcane juice/sugar syrup, B-Heavy Molasses, and C-Heavy Molasses for ESY 2025-26.
Further initiatives include the launch of the “Pradhan Mantri JI-VAN (Jaiv Indhan-Vatavaran Anukool Fasal Awashesh Nivaran) Yojana” to provide financial support for setting up advanced biofuels projects using lignocellulosic biomass and other renewable feedstocks. Measures are also being taken to improve multimodal transportation of ethanol, enhance ethanol storage capacity, and develop allied infrastructure to support higher ethanol blends.
