India is making significant progress in the ethanol sector, with increasing production and blending levels, as well as expanding manufacturing capacity. As of November 2025, the country’s total ethanol production capacity is approximately 1990 crore liters, with the state of Uttar Pradesh contributing 236 crore liters. The government has been actively promoting ethanol-petrol blending through the Ethanol Blended Petrol (EBP) Programme, with a target of achieving 20% ethanol blending in petrol by the Ethanol Supply Year (ESY) 2025-26.
The government has made notable progress towards this goal, with public sector oil marketing companies reaching 10% blending in June 2022, 12.06% in ESY 2022-23, and 14.60% in ESY 2023-24. In ESY 2024-25, over 1,000 crore liters of ethanol were blended, resulting in an average blending rate of 19.24%. In October 2025, blending reached 19.97%, indicating that the country is close to achieving its target.
To encourage the use of non-food biomass for second-generation ethanol production, the government launched the “Pradhan Mantri JI-VAN Yojana” in 2019, which provides financial assistance for the establishment of commercial and demonstration-scale advanced biofuel projects. The scheme aims to promote the use of lignocellulosic biomass and other renewable feedstocks for ethanol production.
The government has also increased ethanol procurement prices over the years, with the average procurement price for ESY 2024-25 being ₹71.55 per liter, including transportation and GST. This price exceeds the cost of refined petrol, which is market-determined and set by oil marketing companies based on international product rates and domestic market conditions.
Overall, India’s progress in the ethanol sector is transforming the country’s energy landscape, supporting economic development, and fostering sustainable progress in rural regions. The government’s initiatives and policies have been instrumental in promoting ethanol production and blending, and the country is on track to achieve its target of 20% ethanol blending in petrol by ESY 2025-26.