The Government of India has implemented a series of initiatives since 2014 to achieve ethanol blending targets under the Ethanol Blended Petrol (EBP) Programme. These efforts have led to remarkable progress, with the blending rate increasing from just 1.53% in 2013-14 to an estimated 14.60% in 2023-24.
The supply of ethanol for blending by public sector Oil Marketing Companies (OMCs) has more than doubled over the past decade, rising from 2,506 crore liters in 2013-14 to an estimated 4,828 crore liters in 2023-24.
This increase has facilitated the substitution of approximately 185 lakh metric tonnes (LMT) of crude oil, contributing to a reduction of about 557 lakh metric tonnes of CO2 emissions during the period.
The government’s strategy to achieve these results includes expanding the range of feedstocks for ethanol production, such as molasses and grains, and introducing an administered pricing mechanism to regulate the procurement of cane-based ethanol. The Goods and Services Tax (GST) on ethanol for blending was also reduced to 5% to encourage production and adoption.
Further, between 2018 and 2022, the government launched Ethanol Interest Subvention Schemes (EISS) to support ethanol production and foster the establishment of Dedicated Ethanol Plants (DEPs) through long-term offtake agreements with OMCs.
