Farmers will benefit from increased ethanol production capacity
24-Jun-2025 08:43 PM
Mumbai. India’s energy transformation is gaining momentum, with a steady rise in ethanol production capacity across the country.
New ethanol plants are being established, and existing distilleries are undergoing expansion and modernization. This growth in infrastructure is boosting the nation’s overall ethanol production capacity, which in turn is expected to benefit farmers significantly.
Ethanol in India is primarily produced from sugarcane and grains such as maize and rice. As production capacity grows, the demand for these raw materials will also increase, offering farmers better prices and greater incentives to grow more sugarcane and maize.
This not only promises to improve farm incomes but also helps India reduce its dependence on imported crude oil by promoting cleaner, greener fuels.
In 2013, India’s ethanol production capacity was just 421 crore litres per year. Today, it has surged to 1,810 crore litres — more than a fourfold increase.
This growth is largely driven by proactive government policies and incentives that support the expansion of clean fuel usage. The national goal of blending 20 percent ethanol in petrol has already been met, and further increases to the blending target are anticipated.
Out of the current production capacity of 1,810 crore litres, 816 crore litres come from molasses, 858 crore litres from grains, and the remaining 136 crore litres from dual-feed plants capable of processing both molasses and grains.
If the full capacity is utilized effectively, it will lead to a significant rise in the use of maize, rice, and molasses, thereby directly benefiting farmers.
However, there is a challenge. The United States is pushing to export its cheaper, genetically modified (GM) maize to India, and is pressuring the Indian government to allow its import.
This poses a dilemma for policymakers, as allowing GM maize could affect domestic producers and raise concerns related to food safety and bioethics.
Despite this, the ongoing expansion of ethanol production holds great promise — both for India's energy security and the financial well-being of its farmers.