India's Ethanol Blending Hits a New Milestone in 2025
The year 2025 has kicked off on a strong note for India’s energy sector, with the Ministry of Petroleum & Natural Gas achieving a record-high Ethanol blending rate of 19.6% in January. This marks the second consecutive month of historic highs, following an 18.2% blending rate in December 2024. The achievement underscores the government’s continued push for ethanol integration under the Ethanol Blended Petrol (EBP) programme, a key initiative to promote cleaner fuels and reduce dependency on crude oil imports.
On the Path to 20% Ethanol Blending
India has been making steady progress toward its ambitious target of 20% ethanol blending by the Ethanol Supply Year (ESY) 2025-26. In January alone, around 82.1 crore litres of ethanol were utilized in the blending programme, contributing to a total of 222.9 crore litres for the November 2024–January 2025 period.
State-run oil marketing companies (OMCs) have also stepped up their ethanol procurement, securing 91.7 crore litres in January and 200.8 crore litres over the November–January period of ESY 2024-25. According to the Ministry, cumulative ethanol blending during this timeframe stood at 17.4%.
With India’s ethanol production capacity at a robust 1,683 crore litres, the country is well-positioned to meet the 20% blending mandate until at least October 2026.
Ethanol Demand and Economic Impact
India’s ethanol demand has witnessed an impressive surge, tripling between 2017 and 2021. The blending rate was merely 2% in 2016-17 but rose to 8% by 2020-21. In June 2022, India successfully reached the 10% blending target five months ahead of schedule for ESY 2021-22. The momentum continued, with ethanol blending climbing to 12.06% in ESY 2022-23 and 14.6% in ESY 2023-24. To achieve the 20% blending target for ESY 2024-25, an estimated 990 crore litres of ethanol will be required.
A Win for Farmers and the Economy
The ethanol blending programme has not only contributed to energy security but also significantly benefited farmers. Over the last ten years, the initiative has facilitated payments of approximately ₹92,409 crore to farmers as of September 2024. Additionally, the programme has resulted in foreign exchange savings of over ₹1,08,655 crore, the substitution of 185 lakh tonnes of crude oil, and a net CO2 reduction of 557 lakh tonnes.
Looking ahead, achieving 20% ethanol blending is expected to generate more than ₹35,000 crore annually in payments to farmers, further strengthening rural economies and promoting sustainable agriculture.
Conclusion
India’s ethanol blending success story is a testament to the country’s commitment to sustainable energy solutions and economic resilience. With consistent policy support, increased production capacity, and strong participation from OMCs and farmers, India is on track to meet its ambitious targets. As ethanol blending reaches new milestones, it is set to reshape the country’s fuel landscape, paving the way for a greener and more self-reliant energy future.