Ethanol Blended Petrol Saves India ₹243 Billion in Foreign Exchange

With the success of the EBP program, India intends to save $4 billion per year by ESY 2025-26

December 12, 2023


The Ethanol Blended Petrol (EBP) program by the Ministry of Petroleum and Natural Gas has saved public sector Oil Marketing Companies ~5.09 billion liters of petrol during the Ethanol Supply Year (ESY) 2022-23.

This resulted in savings of ₹243 billion (~$ 2.914 billion) of foreign exchange and expeditious payment of ₹193 billion (~$ 2.313 billion) to farmers.

The Minister of State in the Ministry of Petroleum and Natural Gas, Rameswar Teli, shared the information in a written reply in Rajya Sabha.

So far, the government has approved 1,212 projects, including 590 molasses-based,474 grain-based, and 148 dual-feed-based projects under the interest subvention program to enhance ethanol production.

Under the program, in June 2022, the government had set a target of 20% ethanol blending in petrol by ESY 2025-26. An indicative target of 5% biodiesel blending in diesel is proposed by 2030.

According to the Roadmap for Ethanol Blending in India 2020-25, achieving this target will require approximately 10.16 billion liters of ethanol, which will replace the same quantity of petrol, saving $4 billion annually.

Through the Global Biofuels Alliance, the government aims to accelerate the uptake of biofuels through incentives, technical support, policy sharing, and intensifying utilization of sustainable biofuels.

In June 2023, the timeline for disbursement of loans for ethanol projects was extended to September 30, 2023, to accommodate the complex application processing and coordination required with multiple agencies. The government will provide financial assistance to such projects in the form of interest subvention at a rate of 6% per annum or 50% of the interest charged by banks, whichever is lower, for five years, including a one-year moratorium.

In November 2023, Hindustan Petroleum Corporation said it is investing over ₹14 billion (~$168.12 million) to build a Second-Generation bio-refinery plant in Bathinda, Punjab, using paddy straw to produce ethanol as part of the government’s Ethanol Blending Program.