**Policy Summary: Ethanol Blending Program (EBP) and Biofuel Promotion in India**
The Ministry of Petroleum and Natural Gas is actively promoting biofuels, particularly ethanol, as a sustainable alternative to petroleum products through the National Policy on Biofuels and the Ethanol Blended Petrol (EBP) Programme. This initiative aims to enhance environmental sustainability, reduce crude oil import dependence, conserve foreign exchange, and bolster the domestic agriculture sector.
**Key Achievements and Data (ESY 2014-15 to July 2025):**
* **Farmer Payments:** Over Rs. 1,25,000 crore paid to farmers.
* **Foreign Exchange Savings:** More than Rs. 1,44,000 crore saved.
* **CO2 Reduction:** Approximately 736 lakh metric tonnes net reduction.
* **Crude Oil Substitution:** Over 244 lakh metric tonnes substituted.
**Ethanol Blending Progress:**
* The target of 10% ethanol blending in petrol was achieved in June 2022, ahead of schedule.
* Blending levels have progressively increased: 12.06% in ESY 2022-23, 14.60% in ESY 2023-24, and 19.05% as of July 31, 2025, during the ongoing ESY 2024-25.
* Ethanol blending of 19.93% was achieved in July 2025 alone.
**Government Support Measures:**
* Expanded feedstock options for ethanol production.
* Administered price mechanism for ethanol procurement.
* Reduced GST rate to 5% for ethanol used in the EBP Programme.
* Implemented Ethanol Interest Subvention Schemes (EISS) from 2018-22.
* Dedicated subvention scheme for Cooperative Sugar Mills to convert existing sugarcane-based distilleries into multifeedstock plants.
* Long Term Offtake Agreements (LTOAs) between Oil Marketing Companies (OMCs) and Dedicated Ethanol Plants.
* Multi-modal transportation of ethanol to enhance availability.
* Increased ethanol storage capacity and allied infrastructure.
**Advanced Biofuel Promotion:**
* The 'Pradhan Mantri JIVAN Jaiv Indhan Vatavaran Anukool Fasal Awashesh Nivaran Yojana' (amended in 2024) supports advanced biofuel projects using lignocellulosic biomass and other renewable feedstocks, including crop residue.
* The scheme's total financial outlay is Rs. 1,969.50 crore, with Rs. 1,800 crore allocated for commercial-scale advanced biofuel projects and Rs. 150 crore for demonstration-scale projects.
* The scheme aims to provide remunerative income to farmers, create employment, address environmental pollution from biomass burning, and contribute to the Swachh Bharat Mission.
**Biodiesel Promotion:**
* Prescribed indicative target of blending of biodiesel in diesel.
* Direct sale of biodiesel permitted under the National Policy on Biofuels.
* "Guidelines for Sale of Biodiesel for Blending with High Speed Diesel for Transportation Purposes-2019" have been notified.
* Reduction of GST rate for procurement of biodiesel for blending programme from 12% to 5%.
**Ministerial Statement:**
The government is committed to strengthening the biofuel ecosystem to ensure energy security, reduce crude oil imports, support farmers, and promote environmental sustainability.
Key Entities Referenced
Ministry of Petroleum and Natural Gas: The Indian government ministry responsible for the exploration, production, refining, distribution, marketing, import, export, and conservation of petroleum, natural gas, petroleum products, and liquefied natural gas.
Hardeep Singh Puri: The Union Minister of Petroleum and Natural Gas in India.
Lok Sabha: The lower house of the Parliament of India.
National Policy on Biofuels: A government policy document promoting the production and use of biofuels in India.
Ethanol Blended Petrol EBP Programme: A government program promoting the blending of ethanol in petrol to reduce dependence on crude oil imports and promote the domestic agriculture sector.
Ethanol Supply Year ESY: A yearly period used to track the supply and blending of ethanol in petrol under the EBP programme.
Public Sector Oil Marketing Companies OMCs: Oil marketing companies in the public sector responsible for achieving ethanol blending targets.
Pradhan Mantri JIVAN Jaiv Indhan Vatavaran Anukool Fasal Awashesh Nivaran Yojana: A government scheme to promote advanced biofuel production in the country using lignocellulosic biomass and other renewable feedstocks.
Ministry of Petroleum & Natural Gas
Ethanol Blending Boosts Farmers’ Income and Rural
Economy: Petroleum Minister Hardeep S. Puri
Posted On: 21 AUG 2025 7:19PM by PIB Delhi
The Government has achieved remarkable progress in promoting biofuels as a sustainable alternative to
petroleum products, stated Union Minister of Petroleum and Natural Gas, Shri Hardeep Singh Puri, in a
written reply to a starred question in Lok Sabha today.
The promotion of use of biofuels has been undertaken through the National Policy on Biofuels. Government
has been promoting the blending of ethanol in petrol under the Ethanol Blended Petrol (EBP) Programme
with multiple objectives. As a green fuel, ethanol supports environmental sustainability efforts of the
Government, reduces dependence on crude oil imports while saving foreign exchange, and promotes the
domestic agriculture sector.
The EBP Programme has resulted in expeditious payment to farmers of more than Rs.1,25,000 crore from
Ethanol Supply Year (ESY) 2014-15 up to July 2025, besides savings of more than Rs.1,44,000 crore of
foreign exchange, net CO2 reduction of about 736 lakh metric tonnes and substitution of more than 244 lakh
metric tonnes of crude oil.
Under the EBP Programme, Public Sector Oil Marketing Companies (OMCs) achieved the target of 10%
Ethanol blending in petrol in June 2022, i.e. five months ahead of the target during ESY 2021-22. The
blending levels further increased to 12.06% in ESY 2022-23, 14.60% in ESY 2023-24, and 19.05% as on 31st
July 2025 during the ongoing ESY 2024-25. During July 2025 alone, Ethanol blending of 19.93% was
achieved.
To support ethanol production across the country, the Government has taken several steps including
expansion of feedstock for ethanol production, administered price mechanism for ethanol procurement,
lowered GST rate to 5% for ethanol used in the EBP Programme, introduction of various Ethanol Interest
Subvention Schemes (EISS) during 2018-22, and a dedicated subvention scheme for Cooperative Sugar Mills
to convert existing sugarcane-based distilleries into multi-feedstock plants for ethanol production from
molasses as well as grains. Additionally, Long Term Offtake Agreements (LTOAs) between OMCs and
Dedicated Ethanol Plants, multimodal transportation of ethanol to enhance availability, and increasing ethanol
storage capacity along with allied infrastructure have been put in place.
Further, to facilitate advanced biofuel production, the Government has notified the 'Pradhan Mantri JI-VAN
(Jaiv Indhan- Vatavaran Anukool Fasal Awashesh Nivaran) Yojana' in 2019, amended in 2024, informed Shri
Puri. The scheme aims to establish advanced biofuels projects in the country using lignocellulosic biomass
and other renewable feedstocks including crop residue. It also provides remunerative income to farmers for
their otherwise waste agriculture residues, creates rural and urban employment opportunities, addresses
environmental pollution caused by biomass burning, and contributes to the Swachh Bharat Mission. The
scheme has a total financial outlay of Rs. 1,969.50 crore, of which Rs. 1,800 crore is allocated for
commercial-scale advanced biofuel projects and Rs. 150 crore for demonstration-scale projects.
Government has also taken several measures to promote the use of biodiesel. These include prescribing
indicative target of blending of biodiesel in diesel/direct sale of biodiesel under the National Policy on
Biofuels, notifying the 'Guidelines for Sale of Biodiesel for Blending with High Speed Diesel for
Transportation Purposes-2019', and reduction of GST rate for procurement of biodiesel for blending
programme from 12% to 5%.
Shri Puri reiterated that the Government is fully committed towards strengthening the biofuel ecosystem in the
country to ensure energy security, reduce crude oil imports, support farmers, and promote environmentalsustainability.
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MN
(Release ID: 2159409)