India has crossed a major milestone in its biofuel transition, with more than 1,000 crore litres of ethanol blended in petrol during the Ethanol Supply Year (ESY) 2024–25, achieving an average blending rate of 19.24 per cent, Parliament was informed on Thursday. Ethanol blending touched 19.97 per cent in October alone, bringing the country close to its 20 per cent target.
Providing details in a written reply to the Rajya Sabha, Union Minister of State for Petroleum and Natural Gas Suresh Gopi said the progress reflects sustained efforts under the National Policy on Biofuels–2018, which was amended in 2022 to advance the 20 per cent ethanol blending target from 2030 to ESY 2025–26.
The minister highlighted that Public Sector Oil Marketing Companies (OMCs) have consistently exceeded earlier benchmarks. The 10 per cent ethanol blending target was achieved in June 2022, five months ahead of schedule during ESY 2021–22. This was followed by 12.06 per cent blending in ESY 2022–23 and 14.60 per cent in ESY 2023–24, indicating a steady year-on-year increase.
To ensure uninterrupted availability of raw materials and adequate production capacity, the government has implemented a series of policy and fiscal measures. These include expanding the range of feedstock permitted for ethanol production, implementing an administered pricing mechanism for ethanol procurement under the Ethanol Blended Petrol (EBP) programme, and reducing the Goods and Services Tax on ethanol meant for blending to 5 per cent. Multiple Ethanol Interest Subvention Schemes have also been introduced to encourage investments in ethanol distillation infrastructure.
In a significant move to secure feedstock, the government allocated 52 lakh metric tonnes of surplus Food Corporation of India rice each for ESY 2024–25 and ESY 2025–26 for ethanol production. Additionally, 40 lakh metric tonnes of sugar have been diverted for ethanol production during ESY 2024–25. For ESY 2025–26, ethanol production has been permitted without restriction from sugarcane juice, sugar syrup, B-heavy molasses and C-heavy molasses.
The minister also drew attention to the Pradhan Mantri JI-VAN (Jaiv Indhan–Vatavaran Anukool Fasal Awashesh Nivaran) Yojana, notified in 2019 and amended in 2024. The scheme aims to promote advanced biofuels, including Sustainable Aviation Fuel, using lignocellulosic biomass and other renewable feedstocks.
Under the JI-VAN scheme, financial assistance of up to ₹150 crore per project is available for commercial-scale biofuel projects, while demonstration-scale projects can receive support of up to ₹15 crore. The initiative is intended to address environmental concerns, manage agricultural residue, and reduce dependence on fossil fuels.
With blending levels nearing the 20 per cent mark well ahead of the revised deadline, the ethanol programme has emerged as a key pillar of India’s energy security strategy. It is also expected to support farmers through diversified demand for agricultural produce, reduce crude oil imports, and contribute to lower carbon emissions in the transport sector.
