Lok Sabha Question No. 2384 (UNSTARRED), answered on 2025-03-13
Subject: Enhancing Ethanol Production and Blending in India
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Shri Anup Sanjay Dhotre

## LOK SABHA

## UNSTARRED QUESTION No. 2384

TO BE ANSWERED ON 13 th  March, 2025

## ENHANCING ETHANOL PRODUCTION AND BLENDING IN INDIA

## 2384.  SHRI ANUP SANJAY DHOTRE:

## पेᮝोिलयम और ᮧाकृितक गैस मंᮢी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a)  the steps taken/being taken by the Government to increase ethanol production in India, particularly from non-food sources such as agricultural waste and municipal solid waste;
- (b)  the current status of ethanol blending in petrol and the targets for the next three years, year-wise;
- (c)  the  criteria  by  which  the  Government  is  supporting  the  development  of  2G  and  3G ethanol technologies and the incentives being offered to encourage investment in these areas;
- (d)  the measures taken/being taken by the Government to address the challenges faced by ethanol producers, including pricing, transportation and storage issues;
- (e)  the  criteria  by  which  the  Government  is  coordinating  with  State  Governments,  oil marketing  companies  and  other  stakeholders  to  promote  ethanol  production  and blending in India; and
- (f) the estimated impact of increased ethanol blending on India's energy security, greenhouse gas emissions and farmer incomes?

## ANSWER

## पेᮝोिलयम और ᮧाकृितक गैस मंᮢालय मᱶ रा᭔य मंᮢी (᮰ी सुरेश गोपी)

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM & NATURAL GAS (SHRI SURESH GOPI)

(a) The Government, since 2014, has taken several steps to increase ethanol production in India which inter-alia includes expansion of feedstock for ethanol production, administered price mechanism  for ethanol procurement under the Ethanol Blended Petrol  (EBP) Programme,  lowered  GST  rate  to  5%  for  ethanol  for  EBP  Programme,  amendment  to Industries (Development and Regulation) Act to facilitate intrastate and interstate movement of ethanol, introduction of various Ethanol Interest Subvention Schemes (EISS) during 201822, for ethanol production from molasses as well as grains, Long Term Offtake Agreements (LTOAs) signed by OMCs with Dedicated Ethanol Plants, notified the 'Pradhan Mantri JIVAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana' 2019, amended in 2024, to provide financial assistance for setting up Advanced Biofuels projects in the country using lignocellulosic biomass and other renewable feedstock.

(b) Public  Sector  Oil  Marketing  Companies (OMCs)  have  achieved  ethanol  blending  in petrol of 14.60% in ESY 2023-24 and 17.98% in ESY 2024-25 upto 28 th February 2025. For the  month  of  Febraury  2025,  ethanol  blending  of  19.68%  was  achieved  by  Public  Sector OMCs. The National Policy on Biofuels, inter-alia advanced the target of 20% blending of ethanol  in  petrol  to  Ethanol  Supply  Year  (ESY)  2025-26  from  2030.  The  'Roadmap  for Ethanol Blending in India 2020-25' provides guidance to achieve the target of 20% ethanol blending in India by 2025-26'.

(c) Ethanol  production  plants  including  Second  Generation  (2G)  and  Third  Generation (3G)  plants  are  primarily  set  up  by  entrepreneurs/companies/co-operative  societies  etc., depending upon the techno-economic viability of the project as per their investment plans. Under the PM JI-VAN Yojana, the maximum financial assistance of Rs.150 crore per project for commercial projects and Rs.15 crore per project for demonstration projects has been set for improving commercial viability as well as promoting R&D for development and adoption of technologies in the field of production of 2G and 3G ethanol. (d) The Government has introduced administered price mechanism for ethanol procurement under the Ethanol Blended Petrol (EBP) Programme. In line with the 'Ethanol procurement policy on a long term basis under Ethanol Blended Petrol (EBP) Programme', the ex-mill price of ethanol derived from sugarcane based raw materials is declared by the Government and ex-mill price of ethanol from damaged and surplus food grains is decided by Public Sector Oil Marketing Companies (OMCs). Further, OMCs have adopted multimodal transportation  of  ethanol  to  enhance  availability  of  ethanol  and  are  also  increasing  ethanol storage  capacity  along  with  other  allied  infrastructure  for  handling  of  higher  blends  of ethanol. (e ) & (f) The National Policy on Biofuels -2018 lays out the roles and responsibilities of all  the  stakeholders  including  Ministries/Departments/States  with  respect  to  biofuels  to synergise  efforts.  It  also  provides  an  institutional  mechanism  for  overall  coordination, effective  end-to-end  implementation  and  monitoring  of  biofuel  programmes.  Various  State Governments  also  provide  incentives  for  encouraging  ethanol  production.  Under  the  EBP Programme, since 2014-15, ethanol blending in petrol by Public Sector OMCs has resulted in approximate savings of more than Rs.1,20,000 crore of foreign exchange, Net CO2 reduction of about 626 lakh metric tonne and expeditious payment to farmers of more than Rs.1,04,000 crore upto January 2025.

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