New Delhi: India’s ethanol-blending programme, originally designed largely to support the sugar industry and improve returns for farmers, is increasingly shifting towards grain-based production, raising concerns over food security, water use and the sustainability of higher blending targets.
Grains now dominate ethanol production
The ethanol programme was initially driven by sugarcane, particularly molasses and cane juice. However, cereal grains have steadily become a major source of ethanol.
In 2023-24, grain-based feedstock accounted for nearly 60 per cent of the 673 crore litres of ethanol supplied to oil marketing companies. For the supply year ending October 2026, about 72.5 per cent of the 1,048.3 crore litres allocated to distilleries is expected to come from grains, while only 27.5 per cent will come from sugarcane-based sources.
The shift has become particularly significant as high sugar prices and low projected stocks are expected to restrict the diversion of sugarcane towards ethanol.
Rice dependence raises questions
With sugar diversion likely to remain limited and maize supplies facing potential pressure from weather conditions, rice could become increasingly important for sustaining ethanol production.
The government had allocated 7.2 million tonnes of surplus Food Corporation of India rice to ethanol distilleries for 2025-26. However, using subsidised rice for fuel has raised questions because rice requires substantial quantities of water to cultivate, while the grain also has an important role in food supply.
The discussion therefore goes beyond ethanol and touches on how India balances energy requirements with food security and agricultural sustainability.
A slower approach may help
One proposed solution is to encourage less water-intensive crops such as bajra and jowar as ethanol feedstock rather than relying heavily on FCI rice. Another is to avoid pushing blending targets faster than available feedstock and market conditions justify.
India’s ethanol programme has expanded considerably, but the debate now is about ensuring that the drive towards cleaner fuel does not unintentionally create new pressures on food grains, farmers and scarce water resources.