India’s ethanol blending programme has led to payments of over Rs 1,43,822 crore to farmers between Ethanol Supply Year (ESY) 2014-15 and December 2025, while saving more than Rs 1,63,395 crore in foreign exchange, Minister of State for Petroleum and Natural Gas Suresh Gopi told Parliament on Thursday. The initiative has also reduced carbon emissions by about 832 lakh metric tonnes and replaced over 277 lakh metric tonnes of crude oil.
In a written response to the Lok Sabha, the minister stated that the Ethanol Blended Petrol (EBP) programme, apart from benefiting farmers, has helped achieve a net CO2 reduction of approximately 832 lakh metric tonnes and substituted more than 277 lakh metric tonnes of crude oil.
He said the government has taken several measures to increase ethanol production in the country to achieve 20% blending of ethanol in petrol. These include expanding feedstock for ethanol production, an administered price mechanism for ethanol procurement under the EBP programme, lowering the GST rate to 5% for ethanol supplied under the programme, and introducing various Ethanol Interest Subvention Schemes (EISS) during 2018–22.
Other initiatives include a dedicated subvention scheme for cooperative sugar mills to convert existing sugarcane-based distilleries into multi-feedstock plants capable of producing ethanol from molasses as well as grains, signing 233 long-term offtake agreements between Oil Marketing Companies (OMCs) and dedicated ethanol plants, allocating 72 lakh metric tonnes of surplus Food Corporation of India (FCI) rice for ethanol production for ESY 2025-26, diverting 40 lakh metric tonnes of sugar for ethanol production in ESY 2024-25, and allowing unrestricted production of ethanol from sugarcane juice, sugar syrup, B-heavy molasses, and C-heavy molasses for ESY 2025-26.
Further steps include notifying the “Pradhan Mantri JI-VAN (Jaiv Indhan–Vatavaran Anukool Fasal Awashesh Nivaran) Yojana” to provide financial assistance for setting up advanced biofuel projects using lignocellulosic biomass and other renewable feedstock, enabling multimodal transportation of ethanol, and increasing ethanol storage capacity along with related infrastructure to support higher blending levels.
