Bihar is looking to grow in the ethanol manufacturing segment, as nine projects have begun production with around 1,500 kilo litres per day (klpd) capacity. The state government plans to showcase these projects at the upcoming global investor's summit ‘Bihar Business Connect 2023’, which is to be held from 13 to 14 December, 2023.

The state is the sixth-largest producer of sugarcane in the country. Additionally, the supporting policy would help it to become a leader in ethanol production in the country. As many as 47 ethanol projects in Bihar have been approved under various ethanol interest subvention schemes from July 2018 to April 2022, of which, seven projects are molasses-based, 32 grain-based and eight dual feed.

Under the scheme for extending financial assistance to sugar mills for expanding ethanol production capacity, the central government extends soft loans through banks to the mills for setting up new distilleries/ expansion of existing distilleries and installation of incineration boilers or installation of any method as approved by Central Pollution Control Board (CPCB) for zero liquid discharge (ZLD).

During the last three years, around Rs 9.32 crore under the Ethanol Interest Subvention Scheme has been released by the government for four projects to enhance distillation capacities. Ethanol manufacturing in the state using sugarcane juice, maize and broken rice as feedstock has significant potential for growth.

The state government has formulated and notified Ethanol Production Promotion Policy, 2021. It proposes to make ethanol production in the state more attractive for potential investors, with the aim of augmenting the development of ethanol manufacturing industries.