India currently has over 450 crore litres of unused ethanol production capacity, slowing the growth of the biofuel sector, according to the Indian Sugar and Bio-Energy Manufacturers Association (ISMA). The association has called on the government to approve ethanol exports to better utilize this surplus.
Massive Production Capacity Remains Idle
ISMA Director General Deepak Ballani highlighted that India has already built the necessary infrastructure to produce ethanol but much of it is lying idle. “India can produce up to 1,900 crore litres of ethanol annually—900 crore litres from sugar-based feedstock and 1,000 crore litres from grains such as rice and maize,” Ballani explained. However, the current allocation of only 289 crore litres of ethanol to the sugar sector for ESY 2025–26 — just 27.5% of total allocations — has created a significant imbalance. As a result, a large portion of distillery capacity remains underutilized.
Call for Export Approval and Higher Blending
ISMA urges the government to permit the export of surplus ethanol. Ballani also recommended increasing the level of ethanol blending in petrol, which would further strengthen the sector and help meet domestic energy needs.
Economic and Environmental Benefits
Ethanol blending has already provided substantial benefits to the country:
*Saved ₹1.55 lakh crore in foreign exchange
*Boosted farmers’ income by around ₹1.36 lakh crore
*Reduced CO₂ emissions by nearly 790 lakh metric tonnes, equivalent to taking 175 lakh vehicles off the road
As reported by chinimandi.com, Ballani emphasized that leveraging unused capacity through exports and higher blending could significantly enhance India’s energy security, support farmers, and contribute to environmental goals.
