Grain ethanol can generate over ₹35,000 cr in direct payments to farmers

From achieving 10% ethanol blending ahead of schedule in 2022 to reaching a remarkable 19.6% blending in January 2025, India has demonstrated its capability to scale clean energy solutions rapidly according to a recently released ‘Thought Leadership Report.

India’s ethanol sector has emerged as a global clean energy success story by reaching nearly 20 percent ethanol blending in petrol—well ahead of its 2025 target. A recently released ‘Thought Leadership Report,’ along with a subsequent roundtable conference organised by Primus Partners in collaboration with the Grain Ethanol Manufacturers Association (GEMA) and the Indian Federation of Green Energy (IFGE), lays out a strategic roadmap. This roadmap underscores ethanol’s critical contribution to India’s goals of enhancing energy security, fostering rural development and advancing climate action. The report advocates for increased policy support, enhanced stakeholder collaboration and significant investments in technology—especially for grain-based sources such as maize and surplus rice—to drive the next phase of growth in ethanol blending.

A Platform for Progress

From achieving 10 percent ethanol blending ahead of schedule in 2022 to reaching a remarkable 19.6% blending in January 2025, India has demonstrated its capability to scale clean energy solutions rapidly. The ethanol blending initiative has already saved over Rs. 1.08 lakh crore in foreign exchange, substituted nearly 185 lakh metric tonnes of crude oil, and reduced 557 lakh metric tonnes of CO₂ emissions. The report also addressed myths around India’s food security, showing it is a grain surplus country which can cater to the needs of food and ethanol production without causing scarcity. Every year, India has a surplus of around 165 lakh metric tonnes of grain that could be used for ethanol.

Charting a Sustainable Path Forward

The Thought Leadership Report identifies grain-based ethanol, particularly from maize and surplus grains like broken rice, as a key lever for sustainable expansion. It emphasises the environmental and economic advantages of maize—India’s least water-intensive feedstock with strong ethanol conversion efficiency. The report projects that 165 Lakh Metric Tons of surplus grain could be utilised annually to generate over Rs. 35,000 crores in direct payments to farmers, reinforcing rural prosperity and arresting urban migration.

However, to maintain this momentum, the sector faces several critical challenges. One of the primary concerns is the availability and pricing of feedstock, particularly with the rising costs of maize and increasing competition from other sectors for the same resources. Additionally, ethanol procurement prices have not kept pace with the escalating costs of feedstock, putting financial strain on producers. Compounding these issues is the decline in by-product margins, such as those from Distiller’s Dried Grains with Solubles (DDGS), which further impacts the overall viability and profitability of distillery operations.

The roundtable and accompanying report emphasise the need for urgent, actionable policy reforms to address the sector’s challenges and ensure sustainable growth. Key recommendations include scaling up maize cultivation nationwide to secure a stable and sufficient feedstock supply. Additionally, the introduction of dynamic pricing for grain-based ethanol is proposed to better align procurement prices with fluctuating feedstock costs. To bridge the gap until maize production is adequately scaled, the report advocates for an uninterrupted supply of damaged, broken, and surplus rice from the Food Corporation of India (FCI). Furthermore, promoting robust domestic market linkages for ethanol by-products such as Distiller’s Dried Grains with Solubles (DDGS) is essential to enhance the economic viability of ethanol production.

The report release was followed by a roundtable conference organised by Primus Partners, in partnership with Grain Ethanol Manufacturers Association (GEMA) and IFGE (Indian Federation of Green Energy). Herein various industry experts and policy leaders—including His Excellency Ambassador Kenneth H. da Nobrega, Brazilian Ambassador to India,  Ashwini Srivastava, Joint Secretary, Department of Food and Public Distribution, Vivek Shukla, Deputy Director General, Commission for Agricultural Costs and Prices (CACP), Ministry of Agriculture and Farmers Welfare Vaibhav Dange, Green Fuel Expert and Abhinav Singhal, Committee Head and Treasurer of Grain Ethanol Manufacturers Association—shared their perspectives on the path forward for grain ethanol. The panel discussed important issues, prospects, and workable solutions in order to support the industry and guarantee long-term success.

“We understand the current challenges of India’s grain ethanol story industry. There is a roadmap being planned; it will address multiple issues – feedstock availability and supply of broken and surplus rice from FCI, scope for E100/E93/E85, possibility of SAF (Sustainable Aviation Fuel), etc. We need to work together on this” Said Ashwini Srivastava, Joint Secretary, Department of Food and Public Distribution.

PM Modi initiative – “Ethanol Blending program (EBP)” is a great step forward by the GOI to ensure India’s future energy security, rural development, increasing farmer’s income manifold and reducing carbon footprint in the environment. In the last two years, Grain Ethanol Industry has grown & become the largest contributor to the EBP of India. Still, India being a Grain surplus country- the Grain Ethanol Industry requires timely support from Government of India with right policy initiatives & direction to grow and thrive in the future” said, Abhinav Singal, Treasurer, Grain Ethanol Manufacturers Association (GEMA).

“India’s ethanol success is a result of bold policy decisions and collaborative industry efforts.  The grain-based ethanol industry, in particular, holds immense potential to drive rural economic development, enhance farmer incomes, and ensure year-round ethanol production. It must be actively promoted through supportive policies, assured feedstock supply, and fair pricing mechanisms. This roundtable is a step toward building consensus among stakeholders and crafting actionable strategies that will ensure long-term sustainability and growth of the ethanol sector. IFGE remains committed to enabling a robust and future-ready ethanol ecosystem that supports India’s clean energy transition and national energy security.” Said Sanjay Ganjoo, Director General, IFGE (Indian Federation of Green Energy).

The Way Forward

This roundtable and the release of the Thought Leadership Report underscore the government’s commitment to a structured, strategic, and inclusive ethanol roadmap—one that harmonizes the interests of energy, environment, and rural India. Going forth, we eye E100, flex-fuel-vehicles, sustainable aviation fuel, etc. Given such ambitious goals, it is important the government and industry come together and shape a cleaner and prosperous future.