Ministry of Petroleum & Natural Gas

Ethanol as an alternate fuel

Posted On: 03 FEB 2021 2:06PM by PIB Delhi

Government has been promoting use of ethanol as a blend stock with main automotive fuel like petrol in line with the National Policy on Biofuels (NBP) -2018 under the Ethanol Blended Petrol (EBP) Programme. This policy envisages an indicative target of blending 20% ethanol in petrol by 2030.

Government has since allowed production of ethanol from sugarcane and food grain based raw-materials. Department of Food & Public Distribution has informed that the cost of production of ethanol varies from distillery to distillery and depends upon various factors viz. cost of raw material, conversion cost, efficiency of distillery plants etc.. Further, keeping in view the above factors, the Government has fixed the ex-mill price of ethanol from sugarcane based raw-materials and Oil Marketing Companies (OMCs) have fixed the price of ethanol from damaged and surplus rice with FCI for Ethanol Supply Year (ESY) (period from Dec. to Nov.) 2020-21 which is as under:


Category of feed stock

Ex-mill Ethanol Price (Rs./litre)

C-heavy Molasses


B-heavy Molasses


Sugarcane juice / sugar / sugar-syrup


Damaged food grain / Maize


Surplus rice with Food Corporation of India (FCI) Rice



The remunerative prices of ethanol produced from different feedstock has been fixed to encourage supply of ethanol under EBP Programme. In addition to remunerative prices, production of ethanol from various feedstock is also allowed to augment the supply of ethanol under EBP Programme. Furthermore, Government, in order to augment production of ethanol, has notified interest subvention schemes for setting up of molasses and grain based new distilleries or expansion of existing distilleries, setting up of dual feed distilleries, installation of zero liquid discharge system, etc.


The quantity of ethanol supplied to Public Sector OMCs under the EBP Programme in the last three ESYs as under:-



Quantity received under EBP (in Crore litre)








This information was given by the Union Minister for Petroleum and Natural Gas  Shri Dharmendra Pradhan in a written reply in the Rajya Sabha today.





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