The National Policy on Biofuels 2018, as amended in 2022, inter-alia advanced the target of 20% blending of Ethanol in petrol from 2030 to Ethanol Supply Year (ESY) 2025-26. 

 The Government has been promoting blending of ethanol in petrol under the Ethanol Blended Petrol (EBP) Programme wherein Public Sector Oil Marketing Companies (OMCs) sell ethanol blended with petrol. During the ongoing ESY 2024–25, OMCs have achieved an average ethanol blending of 19.05% as on 31.07.2025. In the month of July 2025, Ethanol blending of 19.93% has been achieved. 

 In order to ensure availability of feedstock for ethanol production to achieve 20% Ethanol blending target by the Ethanol Supply Year (ESY) 2025-26, the Government have taken several steps which inter-alia includes:

1. Expansion of feedstock for Ethanol production as per the National Policy on Biofuels, as amended in 2022.
2. Development of Maize Cluster around ethanol plants by Department of Agriculture and Farmers Welfare (DAFW) and a Project by ICAR-Indian Institute of Maize Research (IIMR) titled “Enhancement of maize production in catchment areas of ethanol industries” to increase the production of maize in catchment area of grain-based distilleries.
3. Approval by Government for allocation of 52 Lakh Metric Tonne (LMT) of surplus Food Corporation of India (FCI) rice for ethanol production, each for the ESY 2024-25 (from 1st November 2024 to 31st October 2025) and ESY 2025-26 up to 30.06.2026.
4. Diversion of 40 LMT of sugar for ethanol production allowed for the ESY 2024-25.

Further, to boost ethanol production as well as supply in the country, Government introduced administered price mechanism for Ethanol procurement under the Ethanol Blended Petrol (EBP) Programme.

It lowered GST rate to 5% for Ethanol for EBP Programme, introduced various Ethanol Interest Subvention Schemes (EISS) during 2018-22. This was meant for Ethanol production from molasses as well as grains.

Notably, the move was was part of dedicated subvention scheme for Cooperative Sugar Mills to convert existing sugarcane-based distilleries into multi-feedstock plants for ethanol production.

It has been notified by the Government on 06.03.2025 for Long Term Offtake Agreements (LTOAs) between OMCs and Dedicated Ethanol Plants. 

This information was given by the MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS SHRI SURESH GOPI, in a written reply in Rajya Sabha today.

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