Higher Ethanol Blending Could Save ₹2 Lakh Crore
16-Dec-2025 02:54 PM
Gurugram: A key industry body, the Grain Ethanol Manufacturers Association (GEMA), has stated that blending ethanol with petrol has already saved the country foreign exchange worth ₹40,000 crore. The current blending target is 20 percent. If this target is increased and successfully achieved, India could save up to ₹2 lakh crore on petroleum import costs.
The GEMA president says that currently, the country imports crude oil worth approximately ₹22 lakh crore annually, but this expenditure can be reduced by up to ₹2 lakh crore by increasing the blending of ethanol with petrol. This would be a significant saving, and the government should seriously consider it.
The country is now producing a large amount of ethanol from grains as well as sugarcane components, including maize, rice, and other damaged grains.
The country's ethanol production capacity is rapidly expanding. Previously, domestic consumption of ethanol was low, so the entire capacity was not utilized. Now, even with increased consumption, full capacity utilization is not possible because the capacity has increased significantly over the past few years. New distilleries are being established.
The government's clear policy direction and long-term planning are encouraging entrepreneurs to increase ethanol production capacity. Although there are fluctuations in the production of ethanol from sugarcane components – sugarcane juice, sugar syrup,
B-heavy molasses, and C-heavy molasses – because the government has to ensure adequate supply and availability of sugar at reasonable prices in the domestic market, the production of ethanol from grains is steadily increasing.
The increase in ethanol production will continue only if there is a greater demand for it for blending with petrol.
The main reason for the more than 55 percent reduction in gasoline consumption in the Latin American country of Brazil is the extensive blending of ethanol with gasoline.
In Indonesia, 40 percent of biodiesel production uses palm oil. India also needs to significantly increase its target for ethanol blending in gasoline.