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.
The industry claims it has invested over ₹ 40,000 crore and built an annual sugar‑cane‑based ethanol production capacity of more than 9,000 million litres. For the ethanol supply year (ESY) 2025‑26, industry offers total of 17,760 million litres, which is much higher than the oil marketing companies’ requirement of around 10,500 million litres. Out of these offers, sugar‑cane based units have offered about 4,710 million litres, while grain‑based units (rice, maize) have offered about 13,040 million litres. The industry argues that without a clear, time‑bound national roadmap beyond E20, much of the production capacity for ethanol could remain under‑utilised. They state that higher blending would provide better returns to sugar‑cane farmers, support rural employment, and bolster the bio‑fuel industry’s growth. Achieving E27 will require not just more ethanol production, but also vehicle compatibility, infrastructure, and policy support (such as flex‑fuel vehicles and incentives) to absorb the higher blend. The drop in sugar‑cane based ethanol’s share in the blending programme—from 73% to much lower levels—indicates underlying issues of profitability and feed‑stock diversion.
