The data also reflects that the total grain-based ethanol production capacity is higher than demand to achieve 20 per cent blending under the ethanol blended petrol (EBP) programme, indicating that there is no requirement to source ethanol from sugarcane—considered a water guzzling crop
India’s overall ethanol production capacity coupled with the rapidly expanding grain-based output is sufficient to achieve and sustain the target of 20 per cent blending in petrol, Parliament was informed on Thursday.
Minister of State for Petroleum and Natural Gas, Suresh Gopi in a written response in Lok Sabha said that in the current ethanol supply year (ESY), November 2025 to October 2026, Oil Marketing Companies (OMCs) floated tenders to procure around 1,050 crore litres of ethanol, against which eligible offers aggregated to 1,759 crore litres, indicating substantial surplus.
“Out of the total ethanol allocated so far by OMCs, about 760 crore litre has been allocated from non-sugar based sources. This reflects the rapid expansion of grain-based ethanol capacity in the country and the overall ethanol production capacity in the country is sufficient to achieve and sustain the target of 20 per cent ethanol blending in petrol,” he emphasised.
The data also reflects that the total grain-based ethanol production capacity is higher than demand to achieve 20 per cent blending under the ethanol blended petrol (EBP) programme, indicating that there is no requirement to source ethanol from sugarcane—considered a water guzzling crop.
“As per the Roadmap for Ethanol Blending in India 2020–25 prepared by the Inter-Ministerial Committee led by NITI Aayog, the requirement of ethanol for 20 per cent blending in ESY 2025–26 was estimated at about 1,016 crore litres, of which around 466 crore litres was projected from non-sugar based sources,” the Minister said.
However, the actual offer from non-sugar based ethanol producers has been significantly higher than the projections made in the Roadmap, he added.
Public Sector OMCs achieved the target of 10 per cent ethanol blending in petrol in June 2022, five months ahead of the target during ESY 2021–22.
Increased levels
Ethanol blending levels thereafter increased to 12.06 per cent in ESY 2022–23, 14.60 per cent (ESY 2023–24), and 19.24 per cent (ESY 2024–25).
The government allocated,72 Lakh Tonne (LT) of surplus Food Corporation of India (FCI) rice for ethanol production for ESY 2025-26, diversion of 40 LT of sugar for ESY 2024-25 and unrestricted production of ethanol from sugarcane juice/ sugar syrup, B-Heavy Molasses and C-Heavy Molasses for ESY 2025-26.
The EBP programme has resulted in payment to farmers to a tune of more than ₹1,43,822 crore from ESY 2014-15 up to December 2025. Besides savings of over ₹1,63,395 crore in foreign exchange. It has also achieved a net CO2 reduction of around 832 LT and substitution of more than 277 LT of crude oil.
The procurement prices of ethanol have been increasing over the years. For the ESY 2024-25, the average procurement cost of ethanol stands at ₹71.55 per litre (inclusive of transportation and GST), which is higher than petrol produced in refineries.
Published on February 12, 2026
