ARTICLE 4 #EthanolBlending

The Indian sugar industry is pressing the government to raise the target for ethanol blending in petrol from the current 20% (E20) to 27% (E27), citing unused capacity and investments made in ethanol production.

Prime Minister Narendra Modi is set to inaugurate Hindustan Petroleum Corporation Limited’s (HPCL) state-of-the-art Petroleum Oil Depot in Raipur, Chhattisgarh. The newly constructed facility boasts a storage capacity of 54,000 kilolitres (KL), designed to handle ethanol, petrol, and diesel, marking a major boost to India’s fuel distribution infrastructure.

For ESY 2025-26, the government has issued a tender for about 10.50 billion litres of ethanol supply. In that total, only 289 crore litres (2.89 billion litres) have been allocated to ethanol produced from sugar-based feedstocks (sugarcane juice, B-heavy molasses, etc) — about 28% of the requirement.

The sugar and ethanol industry in India is under pressure due to rising costs, stagnant minimum selling/ethanol prices and increasing cane prices. Industry bodies have formally demanded a raise in MSP of sugar and the procurement prices of ethanol to ensure viability. The government has acknowledged the demand and is considering action.

A high-level delegation representing Bihar’s ethanol industry met with a senior government official in New Delhi to discuss the current challenges facing the sector and explore ways to strengthen ethanol production in the state.