State-run oil marketing companies plan to increase ethanol procurement by about 40 percent to 9.73 billion litres during the current ethanol supply year (November 2024–October 2025). This move aligns with India’s national goal of achieving 20 percent ethanol blending in petrol by 2025, aiming to reduce the country’s reliance on imported oil.

For the 2024-25 ethanol supply year, 3.91 billion litres of ethanol will be sourced from sugarcane-based raw materials, while 5.82 billion litres will come from grain-based processors. This shift will significantly increase the share of grain-based ethanol in the blending programme to 60%, up from 27 percent in 2022-23. According to data from the oil ministry, the national ethanol blending rate in the 2023-24 supply year was 14.6 percent, utilising 7.07 billion litres of ethanol.

Out of this, state oil firms, controlling about 90 percent of petrol retail, purchased 6.79 billion litres for the blending programme. The government’s supportive policies have driven this expansion in grain-based ethanol production. These policies include setting attractive ethanol prices, offering capital support for establishing production facilities, and providing assured offtake agreements.

The government’s decision to allow the use of maize and surplus or damaged rice for ethanol production has further bolstered supply. As a result, ethanol production is no longer confined to traditional sugar-producing states like Uttar Pradesh, Maharashtra, and Karnataka. More states can now participate in the ethanol blending programme, boosting overall production capacity.