Insight Focus
India expands ethanol production to meet E20 target. Corn plantings have surged, raising corn-based ethanol output from 1 million tonnes in 2022 to 11 million tonnes by 2025. Authorities approved USD billion 1.68 in loans for 185 ethanol plants, with 36–38 new facilities expected soon.
With the goal of achieving 20% ethanol blending with gasoline by the end of 2025, India is rapidly expanding its ethanol production capacity through the construction of new grain-based and sugarcane ethanol plants.
According to the most recent OECD-FAO Agricultural Outlook report, India’s ethanol industry is expected to use 22% of the nation’s sugar output by 2032. India is the third-largest sugar exporter after Brazil and Thailand, contributing about 8% to global exports. Currently, around 9% of India’s sugar is used for ethanol production.
Source: OECD
Corn Plantings Surge as Demand Rises
Meanwhile, Indian farmers have increased corn plantings due to the rising use of the crop for ethanol, according to a recent report by the Hindustan Times. The total area of corn planted rose to 9.8 million hectares this summer, a 17% increase from 2024. India plans to raise corn production by 10 million tonnes over the next five years to meet demand for ethanol.
India’s corn-based ethanol production has surged from 1 million tonnes in 2022 to over 6 million tonnes in 2024, and is projected to reach 11 million tonnes by the end of 2025, according to the Economic Times.
Source: OECD
“The idea is that gradually, ethanol from sugarcane will plateau and grains such as corn will be used in its place,” a petroleum ministry official said.
Government Boosts E20 Targets
Authorities have targeted E20 this year, with a further increase to 30% by 2030. The government aims to diversify feedstocks and reduce reliance on sugarcane amid concerns that domestic ethanol blending targets could affect local sugar supply.
In 2020, India’s Food Ministry approved up to USD 1.68 billion in soft loans for 185 sugarcane mills and distillers to set up standalone ethanol production facilities—four times the volume of loans approved under the program in the previous two years. Once installed, these projects will add nearly 4.7 billion litres of additional ethanol production capacity from molasses.
According to several media sources, approximately 36 to 38 new ethanol production facilities could become operational in the near future.
