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India’s ethanol distillation capacity to double by 2025

In a boost to India’s energy security efforts, the country’s ethanol distillation capacity will double by 2025, and ethanol blending with petrol (EBP) will help save foreign exchange of more than ₹30,000 crore, according to a top government official.

While briefing reporters on Tuesday, secretary, department of food and public distribution, Sudhanshu Pandey, said India will achieve 20% target for EBP. Prime Minister Narendra Modi recently said the target of 20% ethanol blended petrol has been preponed by five years to 2025.


This assumes significance given that every dollar increase in price of crude oil raises India’s import bill by ₹10,700 crore on an annualised basis. India spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19.

Also, around 5 crore sugarcane farmers and their families and 5 lakh workers associated with sugar mills and other ancillary activities will be benefitted, Pandey added according to a statement from consumer affairs, food and public distribution ministry.

This comes in the backdrop of protests by farmers against new farm laws. The government has been pushing for ethanol production with surplus sugar production depressing sugar prices and consequently increasing the dues of sugarcane farmers.



“Sugarcane farmers will get timely payment of sugarcane dues as the realization from sale of ethanol is much faster than sale of sugar," the statement said, adding that “It may be noted that India is facing a situation of plenty with surplus sugar, leading to liquidity problem to sugar mills and delayed payments of cane dues. The Government is encouraging sugar mills to divert excess sugarcane to ethanol which is blended with petrol."


The National Biofuel Policy 2018 had earlier envisaged an indicative target of 20% blending of ethanol with petrol and 5% blending of biodiesel with diesel by 2030. The blending percentage of ethanol with petrol has also gone up from 1.53% in 2013-14 to 8.5% in 2020-21.

“Pandey said in the next sugar season 2021-22, about 35 LMT of sugar is estimated to be diverted & by 2025 about 60 LMT of sugar is targeted to be diverted to ethanol, which would solve the problem of excess sugarcane/ sugar and would also help sugar mills in clearing cane price dues of farmers. Shri Pandey said that in the past three sugar seasons about Rs. 22,000 crore revenue was generated by sugar mills/ distilleries from sale of ethanol to OMCs," the statement added.


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