Bioenergy is slowly taking the leading spot in becoming a crucial alternative to conventional fossil fuels in India. Not only is the former more environmentally sustainable, it can also be extremely profitable with the right incentives. At the heart of this remarkable shift are Indian distilleries which help in the generation and subsequent dehydration of ethanol so that it can be blended with petrol. Traditionally, ethanol was used in beverages. Today, a growing portion is being blended with petrol. Distilleries have in a way become the bridge between agriculture and transport and are tied directly to India’s energy strategies.
Over the last ten years, ethanol blending has provided over 1.2 lakh crores as income to farmers. It has also reduced crude imports by 238.68 lakh metric tonnes. Over 1.4 lakh crore has been saved on foreign exchange and CO2 emissions have been cut by 519 lakh metric tons. Ethanol blending has been scaled from 1.53 % in 2014 to 14.6% a decade later. In 2025, India has already crossed 20% blending levels five years ahead of its estimated targets. This achievement has been possible due to a complementary expansion of infrastructure, with over 17,400 retail outlets dispensing E20.
India is clearly on its way to become a vishwaguru in ethanol blending. Currently, Brazil leads with up to 70% blending but in terms of growth rate, India’s progress has been by far the best in the world. Distilleries, which are at the heart of biofuel production have had a huge role to play in getting India where it is. This is how they work in essence: feedstocks like sugarcane molasses, grains, or starch-heavy crops go in and ethanol comes out. This ethanol is then dehydrated so that it can reach fuel-grade purity to be blended with petrol.
Two processes are behind this – fermentation and distillation. After molasses, grains or crop residues are processed, they are fermented and converted into alcohol. They are then distilled and concentrated into ethanol. India’s Ethanol production capacity has surged to 1,685 crore liters annually, benefiting over 5 crore sugarcane farmers. Not only is blending ethanol with petrol helping cities breathe easier, they’re also helping satisfy India’s energy demands by reducing import reliance. At the same time, it’s benefitting farmers by increasing value for them. The best part is that nothing is being wasted in the process. Inputs such as feedstock are used and by-products such as distillers’ dried grains (DDGS) are in turn used for animal feed, closing the loop of a circular economy.
So, distilleries which were earlier only associated with making beverages, are today at the helm of energy security, job creation in farming and transportation, and a sustainable circular economy which provides the opportunity to reuse by-products and minimize waste along the value chain. The remarkable growth in ethanol blending has only been possible due to the government’s support and vision. Financial incentives have been provided to promote the production of ethanol, particularly from molasses which is a critical byproduct of sugar production. These incentives include subsidies and incentives which make fuel-grade ethanol production more viable. Providing a cushion to farmers is the Fair and Remunerative Price (FRP) system, which guarantees that they receive a fair price for their sugarcane. The government’s push for blending ethanol with petrol is expected to enhance domestic production rapidly in the future. This could lead to a scenario where excess ethanol can be exported to European countries where demand is rising rapidly. To make sure to tap into its export potential, India would need to scale up production capacities and improve supply chain efficiency to ensure quality and consistency. India also has other avenues available. For instance, xylitol, a sugar alcohol derived from sugar industry waste has gained popularity in global food and pharmaceutical industries due to its low glycemic index and is being used as a sugar substitute. India, which is one of the largest producers of sugar, is well-positioned to process its sugar industry waste to produce xylitol and to capture this emerging market. There too, distilleries will lead the way.
Vijendra Singh is President of the All-India Distillers’ Association (AIDA), the apex national body representing India’s distillery and ethanol sector.
