Union Minister Nitin Gadkari highlights the growing role of ethanol and biofuels in transforming India's agriculture and energy sectors. With government support, farmers are set to benefit from new income opportunities, including ethanol production from crops like sugarcane and rice straw, while reducing reliance on fossil fuels.
Gadkari assured ethanol producers that the rise of alternative biofuels such as methanol, biodiesel, and hydrogen will not diminish ethanol’s importance in India’s energy sector. Speaking at the 4th Edition of the Sugar-Ethanol and Bio-Energy India Conference (SEIC) 2025 in Delhi, he reiterated the government's commitment to a diversified biofuels sector.
“There is ample space for all green fuels to grow collectively,” Gadkari stated, addressing concerns about competition. He highlighted India’s heavy reliance on fossil fuel imports and the pressing need to expand the biofuels market. “Even if we combine all the alternative green fuels, India will still depend on fuel imports. Ethanol has a significant role to play in our transportation economy,” he said.
Gadkari also raised concerns over the pricing of ethanol in the retail market. He pointed out that Indian Oil had decided to open 400 ethanol pumps but had priced ethanol at Rs 110 per litre, making it more expensive than petrol. “The pricing appears to be a strategy to disincentivise green fuel sales,” he remarked.
To address this, he announced plans to meet with oil marketing companies (OMCs) after the Delhi elections to discuss making ethanol prices more reasonable. “After the Delhi assembly polls, possibly on February 6 or 7, we will hold a meeting to rationalize ethanol pricing. The Petroleum Minister has assured me that the procurement and selling price will be adjusted to a reasonable level,” he confirmed.
Beyond fuel, Gadkari also highlighted innovative uses of ethanol in infrastructure. He revealed that experiments have begun on using lignin, a residue from rice straw biomass conversion, in bitumen for road construction. A pilot project has already been conducted on a stretch of the Nagpur-Jabalpur highway. “This breakthrough could make farmers contributors in the bitumen industry. India faces a bitumen shortage, and our requirement is 90 lakh tonnes, while our refineries can produce only 45-50 lakh tonnes,” he explained. He suggested that lignin be procured at Rs 35 per kg to ensure economic viability for farmers.
The minister also pushed for modernizing sugarcane farming to improve yields and profitability, encouraging the adoption of drones and nano-fertilizers. He pointed out that 400 projects across the country are currently focused on developing bio-compressed natural gas (CNG) from rice straw, with 60 already operational and 360 in progress.
Gadkari expressed confidence in the bright future of India’s biofuels industry. “One thing is very clear… the future of this industry is very, very good. Moving forward, India also plans to explore ethanol exports and develop value-added products, further boosting economic potential,” he said.
Recently Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved an increase in ethanol procurement prices for public sector OMCs for the ethanol supply year 2024-25. The administered ex-mill price of ethanol derived from C-heavy molasses has been raised to Rs 57.97 per litre from Rs 56.58 in the previous year. This move is expected to further incentivize ethanol production and support India's ethanol blending programme.
