New Delhi – In a concerted effort to enhance ethanol blending in petrol, the Government of India has introduced several initiatives aimed at boosting ethanol production and achieving environmental sustainability.
During the Ethanol Supply Year (ESY) 2023-24, approximately 672 crore litres of ethanol were produced and supplied to Oil Marketing Companies (OMCs) for blending with petrol. In the current ESY 2024-25, about 261 crore litres have been supplied as of February 23, 2025. To meet the ambitious target of 20% ethanol blending with petrol by ESY 2025-26, an estimated 1,016 crore litres of ethanol will be required.
To support this goal, the government has notified various Ethanol Interest Subvention Schemes between 2018 and 2022, encouraging the establishment of ethanol productionplants nationwide. Notably, on March 6, 2025, a new scheme was introduced specifically for Cooperative Sugar Mills, facilitating the conversion of existing sugarcane-based plants into multi-feed ethanol production facilities.Additional measures to promote ethanol production include setting remunerative prices for ethanol derived from various feedstocks supplied to OMCs, reducing the Goods & Services Tax (GST) on ethanol intended for the Ethanol Blended Petrol (EBP) Programme from 18% to 5%, and promoting maize as a significant feedstock for ethanol production. Furthermore, OMCs have established Long Term Offtake Agreements (LTOAs) with Dedicated Ethanol Plants (DEPs) to ensure sustained supply.
To support advanced biofuels, the “Pradhan Mantri JI-VAN (Jaiv Indhan – Vatavaran Anukool Fasal Awashesh Nivaran) Yojana,” initially launched in 2019 and amended in 2024, provides financial assistance for setting up advanced biofuel projects across the country.These initiatives underscore the government’s commitment to promoting ethanol production, reducing dependence on fossil fuels, and fostering a more sustainable energy landscape.