News Capsule: Ethanol Oversupply Begins to Surface
05-Dec-2025 10:33 AM
News Capsule: Ethanol Oversupply Begins to Surface
★ India’s ethanol blending in petrol is currently capped at 20%, while the industry now has over 4.5–5 billion litres of surplus ethanol capacity.
★ To utilise this excess, the government should promote flexi-fuel vehicles, which can run on higher ethanol blends such as E85 or above.
★ ISMA’s Deepak Ballani stated that both technology and automakers are ready — what’s needed now is an enabling policy framework. India’s total ethanol production capacity stands at about 19 billion litres, whereas only 12 billion litres will be required in 2025-26 to maintain the 20% blending target.
★ Industry estimates suggest that the commercial rollout of flexi-fuel vehicles could enable additional ethanol consumption of around 3.5 billion litres by 2030. The industry has also requested the government to allow ethanol exports, reduce GST on flexi-fuel vehicles from 28% to 5%, and implement differential fuel pricing to encourage higher ethanol usage.
★ However, production is now exceeding consumption — a development that may not be favourable for sugar mills, maize and rice sectors, which supply raw material for ethanol production.