Challenges Growing in India’s Ethanol Policy

09-Jun-2025 08:51 AM

Challenges Growing in India’s Ethanol Policy
★ India’s new ethanol blending policy is facing resistance from distillers, vehicle manufacturers, and consumers.
★ The government aims to raise the blending ratio from 19% to between 27% and 100%, but challenges such as the demand for cheap ethanol imports from the U.S. and declining domestic profit margins are major concerns.
★ Distillers’ profit from molasses-based ethanol has dropped from 12-13% to just 1-2%.
★ Vehicle makers are not in agreement due to the high cost and taxation of flex-fuel vehicles. Consumers are facing lower mileage and increased maintenance costs with ethanol blends.
★ By 2030, an additional production of 4.75 billion litres and an investment of Rs. 22,000 crore will be needed. The industry is demanding the government raise ethanol procurement prices.