India’s ethanol procurement has seen a significant increase, reaching 4.41 billion liters in the 2023-24 period. However, the growth of ethanol blending in the country may face challenges from distillers and automakers. The Indian government has been pushing for increased ethanol blending in petrol to reduce dependence on fossil fuels and promote renewable energy.
The government’s target is to achieve 20% ethanol blending in petrol by 2025. To achieve this, oil marketing companies (OMCs) are set to increase their procurement target to 1,050 crore liters. This move is expected to provide a boost to the sugar industry, which is a major producer of ethanol in India.
However, the sugar industry itself is facing challenges, with sugar output expected to decline in 2025-26 due to a reduction in cane acreage. This could impact the availability of ethanol for blending. Moreover, the growth of grain-based ethanol supply is expected to take off, which could further change the dynamics of the sugar industry.
The Indian sugar industry is at a crossroads, with the shift towards ethanol production posing both opportunities and challenges. While the increase in ethanol demand provides a new revenue stream for sugar mills, it also raises concerns about the long-term viability of the sugar industry. The industry will need to adapt to the changing market dynamics and invest in new technologies to remain competitive.
Overall, the Indian government’s push for ethanol blending is driving growth in ethanol procurement, but the industry faces challenges from multiple fronts. The decline in sugar output, the rise of grain-based ethanol supply, and the need for distillers and automakers to adapt to the changing landscape will all impact the growth of ethanol blending in India. As the country moves towards achieving its renewable energy targets, the ethanol industry will need to navigate these challenges to ensure a sustainable and successful transition.
In conclusion, India’s ethanol procurement has seen significant growth, but the industry faces challenges from multiple fronts. The government’s push for ethanol blending, the decline in sugar output, and the rise of grain-based ethanol supply are all driving changes in the industry. The sugar industry will need to adapt to these changes to remain competitive, and the government will need to ensure that the growth of ethanol blending is sustainable and environmentally friendly.