As India continues to expand its ethanol programme, improving the economics of production will increasingly depend on how efficiently the country can produce and utilise its feedstocks. Higher crop yields, better use of agricultural residues, feedstock diversification and advances in processing technologies could help reduce production costs while limiting pressure on land and water resources.
In an email interaction with ChiniMandi, Krishna Mohan Puvvada, Regional President, Middle East, India & Africa, Novonesis, discusses the role of farm productivity in improving ethanol economics and India’s cost competitiveness with major producers such as Brazil and the US. He also shares his views on balancing biofuel expansion with food security, the potential of 2G ethanol and resource-efficient crops, and the developments surrounding India’s E20 blending programme.
How can farm productivity improve ethanol economics?
Feedstock is the single biggest driver of ethanol economics, and farm productivity can be key to improving pricing. The approach taken across different regions for improving ethanol productivity varies, but hinges on their agricultural productivity and available surplus feedstocks. India’s sugarcane yield averages around 60-70 tonnes per hectare while Brazil and Australia often exceed 80 tonnes. On maize, India’s average maize yield of around 3.5 tonnes per hectare remains significantly below global benchmarks of 6-7 tonnes.
There are structural reasons for these differences in agricultural productivity. Small and fragmented landholdings, dependence on rainfed agriculture, and low levels of mechanization and limitations in access to technologies can together affect crop productivity. To overcome these challenges, India has taken a unique approach such that ethanol productivity has been driven by leveraging feedstock that reduces the stress on our water table, such as maize. Our waste to wealth approach that utilises surplus agricultural produce, including damaged foodgrains, broken rice and foodgrains is also markedly different from the approach taken in other regions. While we have been able to strike the right balance thus far towards best utilising our feedstock towards ethanol, the future holds challenges including climatic conditions like unseasonal rains and heat stress, and technological challenges like irrigation and seed inputs that can impact led to these yield differences.
Since land, water and cultivation costs are largely fixed per hectare, higher yield is the most important driver that could bring down the cost of feedstock and eventually make the cost of ethanol production more economical. This could be achieved through better agronomy led by biosolutions, improving soil health and increasing nutrient uptake, and empowering crops to be heat resistant. Coupled with irrigation efficiency, quality seeds, and farm mechanization, India will have a productivity boost at the farm level, producing more yield from the same land base without indiscriminately increasing acreage of energy crops putting food security to risk.
A case in point, biostimulants and biofertilizers can help plants better withstand climatic stress and use nutrients more efficiently, resulting in improved yields and lower input costs. Our field evaluations have shown that biostimulants can improve rice yields by 8–10% and sugarcane yields by 15%. In corn, our global field trials have also shown yield gains of more than 150 kg per acre using biosolutions.
Can India compete with Brazil and the US on the cost of producing ethanol per litre?
Among leading ethanol-producing countries, Brazil produces at the lowest cost, followed by America, then India, reflecting the decades of industrial evolution in feedstock choices, plant scale, and engineering maturity. Relative to both Brazil and the US, we are still quite young in our ethanol production journey, but this also means that we can leverage the learnings and more advanced technologies to leapfrog towards competitiveness.
Brazil’s integrated sugarcane mills, high sucrose recovery, and bagasse-based cogeneration keep costs low. The US benefits from large-scale, mechanized corn farming and mature dry-mill processing. Feedstock costs make up 60-70% of India’s total ethanol manufacturing costs, far higher than in mature markets, driven by lower sugarcane and maize yields, fragmented plant scale, and weaker by-product monetization. Closing this gap is incrementally achievable through higher yields, larger integrated distilleries, and better extraction rates.
· We must continue to invest in modern technologies and bring down input costs to make the entire production process more efficient. For example, new generation yeast can increase ethanol yields by 2–3% and reduce fermentation time by up to 25%. Beyond this, it is also worth considering continuous improvements to plants by leveraging data analytics towards improving a plant’s energy and utilities efficiency. This can translates to better plant economics, and savings in energy and costs.
Another important area for consideration is feedstock diversification. Crops such as sweet sorghum and Napier grass are less water-intensive and can grow in more stressed or arid conditions. This gives us an opportunity to reduce dependence on one or two feedstocks while making better use of land and water resources.
The food-versus-fuel debate remains a key concern around biofuels. How can India scale biofuel production while safeguarding food security and avoiding additional pressure on agricultural land?
With energy security becoming a matter of national importance, areas linked to ethanol feedstock production has seen an increase. While this is only a small fraction of the India’s total cultivable land, bringing more land under cultivation of energy crops may not be a sustainable long-term solution.
India can scale biofuels sustainably by prioritizing farm productivity while continuing to leverage diverse feedstocks. A sustainable path combines raising per-hectare yields so more ethanol comes from the same land, ensuring strict feedstock diversification toward genuine surplus and damaged grain rather than fresh harvest, and accelerating agricultural residue-based 2G ethanol (crop stubble, bagasse).
The next phase of the ethanol programme must prioritise 2G ethanol, resource-efficient feedstocks such as sweet sorghum and Napier grass, and life-cycle assessment over simply scaling 1G grain-based capacity. Further, the industry must look towards achieving efficiency through the entire value chain in order to be competitive.
Apart from farm-level productivity, what also matters is achieving higher plant-level conversion rates. Advanced enzymes, for instance, can help release more usable sugars from the same biomass. This means ethanol and biogas plants can potentially produce more energy without requiring more land or feedstock.
At a time when every litre of biofuel matters, even relatively small efficiency gains can have a meaningful impact. Biosolutions can add a layer of efficiency by helping us make distilleries operationally resilient.
What is your perspective on the recent developments surrounding the E20 blending programme?
The Ethanol-blended Petrol programme has significantly reduced India’s petrol and given the country a much-needed cushion to better manage the supply crisis during the recent geopolitical uncertainty. It not only enables With policy clarity for E85 and E100 fuels, the possibility to roll out flex fuel vehicles at scale has been unlocked.
Continued investments in feedstock diversification, streamlining of agri residue supply chain, 2G ethanol production infrastructure, and innovative processing technologies will be crucial to meet the ethanol demand sustainably. Furthermore, the time is now ripe for value addition and generation of new revenue streams from substrates and from ethanol production, including corn oil, improved DDGS (dried distillers grain with solubles) in animal feed, and rice protein extraction for nutritional needs, and hair and skin cosmetics.
At the same time, a diverse country like India has diverse energy needs, and there is no singular pathway towards energy resilience and sustainable mobility. India has made strong progress on various fronts be it biofuels, biogas, electrification, or green hydrogen. Ethanol is one piece of the puzzle in India’s energy diversification strategy, and a key enabler to power India from within.
