Ethanol demand projected to exceed 29 billion liters over the next 15 years

09-Jun-2026 11:46 AM

New Delhi. With the approval for the use of fuel blended with up to 85% ethanol in flex-fuel vehicles, the country's total ethanol demand is projected to rise to 29.63 billion liters by the 2039-40 fiscal year.

Consequently, domestic ethanol demand could increase by 117% over the next 15 years. The number of flex-fuel vehicles (FFVs) is also expected to grow by 50% in the five-year period following the 2034-35 fiscal year. These vehicles can run on petrol blended with 20% to 100% ethanol.

Although the country possesses substantial aggregate ethanol production capacity, distillers have been unable to fully utilize it due to limited demand. New government regulations will help boost capacity utilization.

The price of E-85 ethanol has been set ₹20 per liter lower than that of E-20, providing relief to FFV operators. Ethanol is produced from sugarcane derivatives, rice, maize, damaged grains, and other sources.