Ethanol blending in petrol is boosting farmers’ incomes and strengthening rural economy, Union Petroleum Minister Hardeep Singh Puri said in a written reply to a starred question in the Lok Sabha on Thursday. He added that the government’s push for biofuels is also reducing crude oil imports and supporting environmental sustainability.
Under the National Policy on Biofuels, government has been implementing the Ethanol Blended Petrol (EBP) Programme. Since ESY 2014-15, farmers have earned over Rs 1,25,000 crore from ethanol sales, while savings from reduced crude oil imports have exceeded Rs 1,44,000 crore. The programme has also cut carbon emissions by about 736 lakh metric tonnes and replaced more than 244 lakh metric tonnes of crude oil.
Public Sector Oil Marketing Companies (OMCs) achieved 10% ethanol blending target in June 2022, five months ahead of schedule. Blending levels have steadily increased since then, reaching 12.06% in ESY 2022-23, 14.60% in ESY 2023-24, and 19.05% by July 31, 2025. In July alone, blending touched a record 19.93%.
To encourage ethanol production, government has expanded feedstock options, introduced administered pricing, reduced GST to 5%, and rolled out interest subvention schemes. Cooperative sugar mills have also been supported in converting existing distilleries into multi-feedstock plants. Additionally, long-term offtake agreements, multimodal transport, and improved storage capacity have strengthened the supply chain.
For advanced biofuels, ‘Pradhan Mantri JI-VAN Yojana’, launched in 2019 and revised in 2024 with an outlay of Rs 1,969.50 crore, promotes the use of crop residues and other renewable feedstocks. The scheme provides farmers with additional income, generates rural employment, helps reduce stubble burning, and supports the Swachh Bharat Mission.
Biodiesel promotion has also gained momentum through revised blending guidelines and a GST reduction from 12% to 5%. Puri reaffirmed that these initiatives aim to strengthen India’s biofuel ecosystem, ensure energy security, support farmers, and promote environmental sustainability.
