India's ethanol supplies cross 800-crore-litre mark, grain-based share rises to 76% in July: AIDA
India's cumulative ethanol supplies for Ethanol Supply Year (ESY) 2025-26 crossed the 800-crore-litre mark, according to data compiled by the All India Distillers' Association (AIDA)
About 93 crore litres of ethanol were supplied in July, pushing cumulative ESY 2025-26 supplies past the 800-crore-litre milestone
The grain-based share of monthly ethanol supply rose to around 76% in July, up from about 73% in June, even as overall monthly supply volumes moderated
Maize and surplus Food Corporation of India (FCI) grains were the leading contributors within the grain-based segment, each supplying about 30 crore litres in July
Ethanol Blended Petrol (EBP) Programme
The EBP Programme mandates blending of ethanol with petrol supplied by public-sector Oil Marketing Companies (OMCs), with the objective of reducing crude oil imports, cutting vehicular emissions, and providing an additional revenue stream to farmers and sugar mills. It operates under the National Policy on Biofuels, 2018, as amended in 2022.
Key Details
- National Policy on Biofuels, 2018 (amended 2022) advanced the target of 20% ethanol blending (E20) in petrol from 2030 to Ethanol Supply Year (ESY) 2025-26
- India achieved the interim 10% blending (E10) target in June 2022, five months ahead of its original schedule
- Blending progression: 12.06% (ESY 2022-23) → 14.60% (ESY 2023-24) → 17.98% (ESY 2024-25, up to end-February 2025), en route to the 20% target
- Ethanol Supply Year runs December to November; the government uses an administered price mechanism to fix procurement prices for different feedstocks
The 800-crore-litre cumulative supply figure for ESY 2025-26 tracks progress toward the EBP Programme's 20% blending target, with the current data point being the composition of feedstock (grain vs sugarcane-based) rather than the blending percentage itself.
Shift from Sugarcane (1G) to Grain-Based Ethanol Feedstock
India's ethanol programme initially relied primarily on sugarcane-derived feedstocks — molasses (C-heavy and B-heavy) and sugarcane juice — but policy incentives have progressively expanded grain-based (maize, damaged food grains, and surplus rice) ethanol production to diversify feedstock and reduce pressure on sugar availability and water-intensive sugarcane cultivation.
Key Details
- Grain-based feedstocks now supply the majority of India's ethanol; the July reading of ~76% marks a rise from ~73% in June
- Maize and FCI surplus grains (offered under schemes to divert surplus foodgrain stock to ethanol distilleries) were the two largest grain-based contributors in July, at roughly 30 crore litres each
- The government has used a differential, feedstock-linked price mechanism (fixed administered prices for different categories of molasses and grains) to steer distillery capacity toward grain-based production
- Diverting FCI's surplus/damaged grain stock to ethanol is also a food-management tool, easing storage costs for surplus buffer stock
The rising grain-based share reflects the continuing shift of India's ethanol feedstock mix away from sugarcane molasses toward maize and surplus foodgrain, a trend UPSC frequently tests in the context of food security versus energy security trade-offs (the "food vs fuel" debate).
Environmental and Energy-Security Rationale for Ethanol Blending
Ethanol blending is promoted as a biofuel measure to cut India's oil-import dependence, lower net greenhouse gas and particulate emissions from the transport sector compared to pure fossil fuel, and create a market for surplus agricultural produce.
Key Details
- Ethanol blending is estimated by the government to reduce crude oil import dependence and save foreign exchange, alongside cutting carbon monoxide and hydrocarbon tailpipe emissions relative to unblended petrol
- The National Policy on Biofuels, 2018 also classifies biofuels into Basic (1G — from sugar/starch-based feedstock), Advanced (2G — from agricultural/municipal waste), and 3G biofuels, to guide research and incentive focus
- GST on ethanol supplied for the EBP Programme has been reduced to 5% to make blending economically attractive
The 800-crore-litre supply milestone and the shift to grain-based feedstock are read by policymakers as evidence that the EBP Programme's underlying environmental and energy-security objectives (import substitution, emission reduction, and farm income support) are being met alongside the blending-percentage target.
- Cumulative ethanol supply for ESY 2025-26 crossed 800 crore litres
- July supply: ~93 crore litres
- Grain-based ethanol share: ~76% in July, up from ~73% in June
- Maize and FCI surplus grains: ~30 crore litres each in July within the grain-based segment
- E20 (20% ethanol blending) target under National Policy on Biofuels, 2018 (amended 2022): advanced to ESY 2025-26 from the original 2030 target
- E10 (10% blending) achieved: June 2022, five months ahead of schedule
- GST on ethanol for EBP Programme: 5%