India Ethanol Programme: Ethanol supplies cross 800 crore litres: Why India’s next challenge is demand
India’s ethanol programme has crossed another major volume mark, but the latest supply data also shows a shift in where the fuel is coming from.Grain-based feedstocks accounted for about three-fourths of ethanol supplied in July, with maize and surplus Food Corporation of India (FCI) grains emerging as the biggest contributors.According to data compiled by the All India Distillers’ Association (AIDA), cumulative ethanol supplies crossed 800 crore litres during Ethanol Supply Year (ESY) 2025-26.
Grain-based ethanol gains share as monthly supplies moderate
India received 93 crore litres of ethanol in July, taking cumulative supplies for ESY 2025-26 beyond the 800-crore-litre mark.However, monthly supplies were lower than in June, when 103 crore litres were supplied. Despite this decline, grain-based ethanol increased its share of the monthly supply mix.Grain-based feedstocks accounted for 71 crore litres, or around 76 per cent, of July supplies, compared with 75 crore litres out of 103 crore litres in June. Their share had stood at approximately 73 per cent in June.Within the grain-based segment, maize and surplus FCI grains contributed 30 crore litres each in July. Together, the two feedstocks accounted for nearly 85 per cent of grain-based ethanol supplied during the month.Another 11 crore litres came from damaged food grains, highlighting the contribution of different grain sources to the ethanol supply chain.Bharati Balaji, deputy director general, AIDA, said the 800-crore-litre milestone reflected the scale reached by the domestic ethanol industry.“What is equally significant is the movement in the monthly supply mix. Grain-based ethanol increased its share from around 73 per cent in June to 76 per cent in July, with maize and surplus FCI grains each contributing 30 crore litres,” she said.
Sugarcane-based supplies fall to 24 per cent
Sugarcane-based feedstocks accounted for 22 crore litres in July, down from 28 crore litres in June. Their share of total monthly supplies consequently fell to around 24 per cent from 27 per cent.Within this category, B-Heavy Molasses contributed 17 crore litres, while Sugarcane Juice accounted for 4 crore litres and C-Heavy Molasses for 1 crore litre.The July figures therefore show a supply mix increasingly dominated by grain-based feedstocks, even as the overall volume supplied during the month declined from June.
What happens as ethanol production capacity expands?
AIDA said the industry’s production base has expanded and that the next challenge is ensuring adequate demand for the available ethanol.“The supply side has demonstrated its ability to respond through multiple feedstocks and a growing production base. The next step is to create sufficient demand for this capacity,” Balaji said.She pointed to higher ethanol blending, Flex-Fuel Vehicles and wider applications of ethanol as possible avenues for increasing utilisation.“The industry has created a much stronger production base, and the priority now should be to ensure that this capacity is utilised efficiently. A clear and predictable framework for expanding ethanol applications will be critical to sustaining investments, supporting the agricultural value chain and advancing India’s transition towards cleaner domestic fuels,” Balaji said.According to AIDA, creating additional avenues for ethanol use will become increasingly important as domestic production capacity expands and India pursues its clean mobility and renewable fuel objectives.
