The government has set up an inter-ministerial panel comprising petroleum, heavy industries and food ministries to consider ways to utilise the surplus ethanol manufacturing capacity, including an increase in the blending of ethanol with petrol from the current level of 20%, Food Secretary Sanjeev Chopra said on Tuesday.
“There is a demand from industry to increase the blending of ethanol into petrol from the current 20%. We have a surplus capacity of ethanol manufacturing at 20 billion litres.” Chopra said at the sidelines of the conference ‘ISMA SugarNXT 2026.
At present, oil marketing companies procure 11 to 12 billion litres of ethanol made from sugarcane, rice and maize annually for 20% blending with petrol.
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Disrupted oil supplies
In response to West Asia war which has disrupted oil supplies, Chopra said the committee would look into how to utilise this additional capacity ethanol manufacturing capacities and there are several options including increase in ethanol blending and promotion of flex fuel vehicles is being discussed.
“We may get some news before the next ethanol supply year (which starts in November),” he said while adding that since the launch of ethanol blending programme, there has been savings of Rs 1.65 lakh crore in terms of foreign exchanges so far.
Currently out of the total 400 ethanolmanufacturers, around 250 units are grain based (rice and maize) while the rest operate on sugar-based as feed stock.
Ethanol supply
In the 2025-26 ethanol supply year (November-October) only 2.89 billion litres of ethanol, just 28% of the total requirement, have been allocated from sugar-based feedstocks , compared to 72% or 7.61 billion litres from grain-based sources – 4.78 billion litres from maize (45%), and 2.83 billion litres from rice (22%).
The ministry of petroleum and natural gas recently stated that it is formulating a mechanism to address the issue of excess ethanol capacity with the sugar and food grain processing industry, in consultation with the ministry of food. The options include easing export of ethanol and laying a road map for increasing the share of biofuel blended with petrol.
The Grain Ethanol Manufacturers Assoiation, in a communication to Prime Minister Narendra Modi has suggested adoption of ethanol-based cook-stoves as a complementary option alongside LPG for both domestic households and commercial establishments such as restaurants, street vendors, and institutional kitchens.
The government is conducting a study to assess the feasibility of ‘sweet sorghum’ as an alternate feedstock for production of ethanol to diversify the raw material base for the biofuel, the food had stated. |
