Government Allows Ethanol Production Without Limits for ESY 2025-26

New Delhi, September 2, 2025: The government has allowed sugar mills and distilleries to produce ethanol with no quantitative restrictions in the new Ethanol Supply Year (ESY) 2025-26, which starts in November.

In its recent notification, the Food Ministry added that distilleries and mills can produce ethanol out of sugarcane juice, sugar syrup, B-heavy molasses, and C-heavy molasses. The ministry, in consultation with the petroleum ministry, will review periodically the diversion of sugar towards ethanol so as to maintain a stable domestic availability of sugar.

Sugar Diversion at 40 Lakh Tonnes Fuels 19.05% Ethanol Blending in ESY 2024-25

For the current ESY 2024-25, the Centre has permitted the diversion of 40 lakh tonnes of sugar into ethanol production. As of July 31, 2025, Public Sector Oil Marketing Companies (OMCs) have attained an average rate of blending ethanol at 19.05% with petrol.

Government Advances 20% Ethanol-Petrol Blending Goal to ESY 2025-26 Under Biofuel Policy

The programme is being spearheaded by the government under the Ethanol Blended Petrol (EBP) scheme. According to the National Policy on Biofuels 2018, revised in 2022, the goal of 20% blending of petrol with ethanol has been brought forward from 2030 to ESY 2025-26. The shift is a great leap towards powering India’s clean energy transition and fuel security, while maintaining sugar availability for domestic demand.

W͏͏ith the gov͏er͏nme͏nt p͏͏er͏mi͏tting unrestricted ethan͏o͏l p͏r͏od͏uction ͏for ESY 2͏0͏͏2͏͏5-͏26͏, India is s͏et to acc͏elerate tow͏ards its 20% blend͏ing target, rein͏fo͏rcing energy security and ͏sustainabil͏i͏t͏y͏ goals. ͏The ͏move ens͏u͏͏res s͏ug͏ar ͏d͏ivers͏ion remains͏ bal͏anced͏ with ͏domesti͏c n͏eeds, wh͏͏ile o͏ffering͏͏ ͏s͏ugar m͏ill͏s and͏ ͏͏di͏st͏iller͏ies greater ͏pro͏du͏ct͏ion f͏lexibil͏it͏y͏. This ͏de͏͏cisi͏v͏͏e͏ ste͏p͏ s͏ignals a strong commitment to cle͏ane͏r ͏fuels and re͏d͏uced͏ cru͏de͏ oil depen͏dency.

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