India Ramps Up Ethanol Drive with Year-round Supply, Feedstock Push

October 19, 2025

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(NewKerala.com) Reaffirming India's commitment to a cleaner energy future, Ashwani Srivastava, Joint Secretary, Department of Food & Public Distribution, underscored the government's strategic focus on building a robust, year-round ethanol supply chain. -- Reaffirming India's commitment to a cleaner energy future, Ashwani Srivastava, Joint Secretary, Department of Food & Public Distribution, underscored the government's strategic focus on building a robust, year-round ethanol supply chain.

Speaking at a recent bioenergy event, Srivastava emphasised feedstock diversification as a central pillar of India's biofuel roadmap.

"India now has the production capacity to exceed 20% ethanol blending," Srivastava said. "Our focus is on building a robust, sustainable supply chain that supports both industry and farmers," he added.

Srivastava outlined several initiatives currently underway to secure continuous ethanol production, including the rapid expansion of grain-based ethanol capacity, procurement of broken rice from five states, and the introduction of sweet sorghum as a promising next-generation biofuel crop. He also highlighted the role of cooperative bodies like NAFED and NCCF in aggregating feedstock across the country, enabling a decentralised and farmer-centric model.

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Sumit Sarkar, CEO of the Chhattisgarh Biofuel Development Authority (CBDA), showcased how the state is turning agricultural residues and urban waste into clean energy. READ MORE

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Govt projects 28% ethanol from sugar-based feedstock in 2025-26, industry makes distress call (Fortune India)
Sugarcane arrears may rise as OMCs cut ethanol offtake: Industry (Financial Express)
BCL Industries secures ethanol supply order of 1.07 lakh KL for FY26; shares rise on strong allocation (Business Upturn)
India needs to double sugar exports as surplus rises on lower ethanol output (Reuters)
India may double sugar exports to 2 million tonnes as ethanol diversion falls (The Hindu Business Line)

Excerpt from Chemical Industry Digest: Gulshan Polyols Limited, manufacturer of ethanol, biofuels, and specialty products, bagged a major ethanol supply contract worth approximately ₹1,184.86 crore. The order involves the supply of 1,75,652 kiloliters of ethanol to India’s top oil marketing companies (OMCs), including Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), and Mangalore Refinery and Petrochemicals Limited (MRPL).

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Feedstock Composition

The ethanol allocation for ESY 2025–26 reflects a diverse feedstock mix:

*Maize: 45.68% (~478.9 crore liters)

*FCI Rice: 22.25% (~233.3 crore liters)

*Sugarcane Juice: 15.82% (~165.9 crore liters)

*B Heavy Molasses: 10.54% (~110.5 crore liters)

*Damaged Food Grains: 4.54% (~47.6 crore liters)

*C Heavy Molasses: 1.16% (~12.2 crore liters)

The allocation ensures that both grain-based and sugar-based feedstocks contribute significantly to India’s ethanol supply. READ MORE

Excerpt from Fortune India: ISMA says the share of allocation for the sugar sector has been continuously declining — from 91% in total ethanol supplies in 2019-20, to 83% in 2021-22, 40% in 2023-24, and now to a new low this year.

The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has expressed concerns over the central government’s decision to reduce the share of ethanol made from sugar-based feedstock in the country’s overall ethanol production by cutting the annual production quota it sets for sugar-based ethanol manufacturers each year.

The basis of their complaint is the recent announcement by the government to cut the share of sugar-based feedstock-derived ethanol in the overall estimated production of 1,050 crore litres of ethanol during the Ethanol Supply Year (ESY) 2025-26 to just 28%, or 289 crore litres. The quota for the last ESY was 315 crore litres of ethanol, which accounted for 33% of the overall ethanol production of 950 crore litres estimated for ESY 2024-25.

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Shirgaokar (Niraj Shirgaokar, Vice President, ISMA) said the government’s decision may lead to underutilization of distilleries and urged the authorities to rebalance ethanol allocation in line with the NITI Aayog roadmap by ensuring at least a 50% share for sugar-based feedstocks. He also pointed out that with lower ethanol offtake, only 34 lakh metric tonnes (MT) of sugar are expected to be diverted toward ethanol production, resulting in surplus sugar stocks in the domestic market.

As an immediate measure, the association has urged the government to allocate 150 crore litres of ethanol from sugarcane juice and B-heavy molasses (BHM)—a byproduct of sugar production—during the tender for the next Cycle. READ MORE

Excerpt from Financial Express: The sugar industry also demanded revision of MSP of sugar which has remained unchanged at Rs 31/kg since February, 2019, while FRP has increased by 29% to Rs 355/quintal, which had boosted cost of production to Rs 40.24/kg at present.

Out of total offers, over 4710 million litres is offered from sugarcane based feedstock units and more than 13,040 million litres is offered by the grain-based ethanol makers. READ MORE

Excerpt from Reuters: India needs to double its sugar export allocation to 2 million metric tons in the new season, as lower diversion of sugar for ethanol production is expected to leave a larger domestic surplus, industry officials said on Thursday.

Higher exports from the world's second-largest sugar producer could pressure benchmark New York and London futures which are hovering near five-year lows.

India was the world's second-largest sugar exporter in the five years to 2022/23, with shipments averaging 6.8 million tons annually. But a drought prompted the government to ban sugar exports in 2023/24, allowing only 1 million tons last year.

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India will have a short window of nearly three months to export before Brazilian supplies from the new season start and weigh on global prices.

Domestic sugar prices are currently higher than global rates, but Indian mills expect export parity by early December as new-season supplies begin to pressure local markets, said Ballani.

"Sugar mills will incur losses due to large unutilised capacity for ethanol as many mills expanded capacity following the government's push for 20% ethanol blending in petrol, and they will have to produce more sugar," Ballani said. READ MORE