CCEA Approves Ethanol Price Revision for 2024-25: Strengthening India’s Ethanol Blending Programme and Energy Security

Government Raises Ethanol Procurement Price, Targets 18% Blending to Reduce Crude Oil Imports and Boost Farmer Income.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Shri Narendra Modi, has approved the revision of ethanol procurement prices for Public Sector Oil Marketing Companies (OMCs) under the Ethanol Blended Petrol (EBP) Programme for the Ethanol Supply Year (ESY) 2024-25 (from November 1, 2024, to October 31, 2025).

As part of this approval, the administered ex-mill price of ethanol derived from C Heavy Molasses (CHM) has been raised from ₹56.58 to ₹57.97 per litre, reflecting a 3% increase. This strategic move is aimed at ensuring a steady supply of ethanol, providing price stability for suppliers, and supporting India’s ambition to reduce dependence on crude oil imports, achieve foreign exchange savings, and promote environmental sustainability.

In line with the government’s policy to support sugarcane farmers, GST and transportation charges will continue to be paid separately to ensure fair remuneration and maintain steady ethanol production levels.

Transforming India’s Energy Landscape: The Ethanol Blended Petrol (EBP) Programme

The Ethanol Blended Petrol (EBP) Programme, a key initiative to promote biofuels, has been successfully implemented across India, allowing petrol to be blended with ethanol up to 20%. This programme not only supports clean energy adoption but also contributes to:

✔ Reducing crude oil imports and foreign exchange savings ✔ Enhancing farm-based energy production and providing better returns to sugarcane farmers ✔ Boosting rural employment and fostering economic growth ✔ Lowering carbon emissions, contributing to India’s climate goals

Over the past ten years, India has witnessed remarkable progress in ethanol blending. As of December 31, 2024, ethanol blending has resulted in:

🔹 Foreign exchange savings of ₹1,13,007 crore 🔹 Crude oil substitution of approximately 193 lakh metric tonnes 🔹 Growth in ethanol procurement from 38 crore litres (ESY 2013-14) to 707 crore litres (ESY 2023-24) 🔹 Achieving an average ethanol blending of 14.60% in ESY 2023-24

With this momentum, India is on track to achieve 18% ethanol blending in ESY 2024-25, a crucial step toward reaching the 20% blending target (E20) by ESY 2025-26, five years ahead of the initial 2030 target.

Key Enablers and Government Initiatives for Ethanol Production

To accelerate ethanol blending and ensure a sustainable ethanol supply, the government has implemented several policy measures, including:

✅ Enhancing ethanol distillation capacity to 1,713 crore litres per annum ✅ Long-Term Off-Take Agreements (LTOAs) to establish Dedicated Ethanol Plants (DEPs) in ethanol-deficit states ✅ Encouraging conversion of single-feed distilleries into multi-feed units to increase flexibility ✅ Expanding E-100 and E-20 fuel availability and promoting flex-fuel vehicles ✅ Strengthening supply chain infrastructure, including greenfield and brownfield distilleries, ethanol storage, and logistics facilities

These initiatives also align with India’s “Ease of Doing Business” reforms and contribute to the vision of Atmanirbhar Bharat (Self-Reliant India) by reducing dependency on imported fossil fuels.

Economic and Environmental Benefits

The EBP Programme has led to increased private and public investments in ethanol production, creating employment opportunities and ensuring better financial stability for sugarcane farmers. By advancing ethanol blending, India is:

🌍 Reducing carbon emissions and combating climate change 🛢 Saving billions in foreign exchange through crude oil import reduction 🚜 Providing direct benefits to farmers, ensuring timely payments 🏭 Boosting industrial and rural development by fostering ethanol production and infrastructure growth

A Step Forward for India’s Energy Independence

With the revised ethanol procurement price and accelerated blending targets, the Government of India continues to prioritize clean energy, economic growth, and agricultural sustainability. The success of the EBP Programme demonstrates India’s commitment to achieving energy self-reliance, fostering a green economy, and positioning itself as a global leader in biofuel adoption.

By embracing ethanol as a key alternative fuel, India is paving the way for a cleaner, more sustainable, and self-reliant future—one where economic prosperity and environmental responsibility go hand in hand. 🚀