The National Policy on Biofuels 2018, as amended in 2022, advanced the target for 20% ethanol blending in petrol from 2030 to the Ethanol Supply Year (ESY) 2025-26.
Under the Ethanol Blended Petrol (EBP) Programme, Public Sector Oil Marketing Companies (OMCs) sell ethanol blended with petrol. During ESY 2024–25, OMCs achieved an average blending rate of 19.05% as of 31 July 2025, with a monthly high of 19.93% in July 2025.
To ensure sufficient feedstock for meeting the 20% blending target, the Government has implemented several measures, including:
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Expanding feedstock sources for ethanol production as per the amended Biofuels Policy.
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Developing Maize Clusters around ethanol plants, led by the Department of Agriculture & Farmers Welfare (DAFW), and implementing ICAR-IIMR’s project “Enhancement of maize production in catchment areas of ethanol industries”.
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Allocating 52 Lakh Metric Tonnes (LMT) of surplus Food Corporation of India (FCI) rice for ethanol production in both ESY 2024-25 and ESY 2025-26 (up to 30 June 2026).
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Allowing diversion of 40 LMT of sugar for ethanol production in ESY 2024-25.
To further enhance ethanol production and supply, the Government has also:
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Introduced an administered pricing mechanism for ethanol procurement under the EBP Programme.
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Reduced the GST rate to 5% for ethanol used in the EBP Programme.
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Implemented Ethanol Interest Subvention Schemes (EISS) from 2018–2022 for ethanol production from both molasses and grains.
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Notified a dedicated subvention scheme for Cooperative Sugar Mills (06 March 2025) to convert sugarcane-based distilleries into multi-feedstock ethanol plants.
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Facilitated Long-Term Offtake Agreements (LTOAs) between OMCs and dedicated ethanol plants.
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Launched the Pradhan Mantri JI-VAN Yojana to provide financial support for advanced biofuels projects using lignocellulosic biomass and renewable feedstock.
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Promoted multimodal transportation of ethanol to improve distribution and increased ethanol storage capacity along with related infrastructure for handling higher ethanol blends.
These combined measures aim to achieve the 20% ethanol blending target by ESY 2025-26, supporting India’s transition towards cleaner and more sustainable transportation fuels.
