Government Advances Ethanol Blending Target to 2025, Boosts Production and Supply

The production and supply of fuel-grade ethanol to oil marketing companies (OMCs) surged more than sevenfold from Ethanol Supply Year (ESY) 2013-14 to ESY 2020-21.

This substantial growth has prompted the government to bring forward the target for 20 percent ethanol blending in petrol from 2030 to ESY 2025-26, as announced by Minister of State for Petroleum and Natural Gas Suresh Gopi in a Lok Sabha reply on Thursday.

Ethanol Blended Petrol (EBP) Programme Performance

Under the Ethanol Blended Petrol (EBP) Programme, the volume of blended ethanol rose from 38 crore litres in ESY 2013-14 to 302.3 crore litres in ESY 2020-21.

This resulted in a rise in blending percentage from 1.53 percent to 8.17 percent. During the same period, petrol consumption also grew by approximately 64 percent.

To achieve the 20 percent ethanol blending target by ESY 2025-26, the government has introduced several key measures:

Comprehensive Roadmap: Development of a detailed roadmap for ethanol blending in India.

Feedstock Expansion: Expansion of feedstock sources for ethanol production.

Price and Tax Incentives: Implementation of a remunerative price for ethanol procurement and a reduced GST rate of 5 percent on ethanol for the EBP Programme.

Regulatory Amendments: Amendment of the Industries (Development & Regulation) Act to facilitate the free movement of ethanol across states.

Production Capacity Boost: Introduction of an interest subvention scheme to enhance and expand ethanol production capacity.

Procurement Initiatives: Regular floating of Expressions of Interest (EoI) by public sector OMCs for ethanol procurement.