India needs to significantly ramp up maize cultivation and adopt more flexible grain ethanol pricing policies to fully realize its fuel blending ambitions, according to a new report by consulting firm Primus Partners and the Grain Ethanol Manufacturers Association (GEMA), reports Business Standard.
Titled “Unlocking ₹35,000 Crore for Farmers: The Untapped Potential of Grain Ethanol,” the report outlines strategic recommendations to enhance the grain ethanol sector, which is seen as vital for achieving the government’s ethanol blending goals and reducing emissions.
One of the key challenges identified is the rising cost of maize, which has made ethanol production increasingly unviable and discouraged new investment. The report suggests that this issue could be addressed by incentivizing maize cultivation through high-yield seeds, better fertilizers, and improved irrigation infrastructure.
The report also highlights that grain ethanol producers incurred losses in the last Ethanol Supply Year (November–October), as ethanol procurement prices remained static while input costs, particularly maize, surged. This, it warns, is weakening confidence in the young industry.
To bridge the supply gap, the report recommends ensuring a continuous flow of damaged, broken, and surplus rice from the Food Corporation of India (FCI) as an interim feedstock until maize production scales up. It emphasizes the need for “clear, predictable policies” governing the use of FCI rice for ethanol production.
Another focus area is the expansion of the domestic market for Distiller’s Dried Grains with Solubles (DDGS)—a high-protein animal feed byproduct of grain ethanol. The report proposes encouraging this through tax benefits for feed manufacturers, or tariffs on imported DDGS to support local producers.
India’s ethanol roadmap, driven by the government’s 2030 target of 30% fuel blending, will require approximately 1,735.5 crore litres of ethanol annually. NITI Aayog projects gasoline demand to hit 5,785 crore litres per year by then, and achieving the blending target could cut emissions by up to 347.1 lakh tonnes, including 197.85 lakh tonnes from grain ethanol alone.
The report concludes that aligning policy and production incentives could unlock ₹35,000 crore in value for Indian farmers, while simultaneously supporting national energy security and climate goals.
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