**Executive Summary**
This document is a response to Lok Sabha Unstarred Question No. 1075 regarding the performance of 2G Ethanol Plants, to be answered on February 5, 2026. It details the status of 2G ethanol plants established in India, including the IOCL Panipat plant and other public sector oil company plants. The response includes information on costs, production, capacity, and penalties related to these plants, with specific data provided in Annexure-I and Annexure-II.
**Key Points / Main Content**
* **Government Initiatives and Financial Assistance:**
* The Government notified the "Pradhan Mantri JI-VAN Yojana" in 2019 (amended in 2024) to provide financial assistance for setting up Advanced Biofuels projects.
* **IOCL Panipat 2G Ethanol Plant:**
* Commercial production commenced on November 11, 2023.
* Approved capital cost: Rs. 909 crore ±10%.
* Cumulative expenditure: Rs. 984 crore.
* Installed capacity: 100 KLPD of ethanol production.
* Item-wise expenditure and production details are in Annexure-I and Annexure-II.
* The plant is the first of its kind in India, facing challenges due to straw quality variations.
* IOCL is working with Praj Industries to resolve mechanical issues.
* The plant operated at 62% of its design capacity in December 2025 after recent modifications.
* **Other Public Sector Oil Company Plants:**
* Several other plants are approved under the PM JI-VAN Yojana:
* 185 KLPD bamboo-based plant at Numaligarh, Assam (Numaligarh Refinery Limited).
* 100 KLPD paddy-straw-based plant at Bargarh, Odisha (Bharat Petroleum Corporation Limited).
* 100 KLPD paddy-straw-based plant at Bathinda, Punjab (Hindustan Petroleum Corporation Limited).
* **Penalties and Withholdings:**
* IOCL deducted Rs. 2.84 crore under Price Reduction Schedule (PRS) for delays in delivery and execution.
* IOCL withheld Rs. 5.25 crore from the technology provider due to non-completion of the Performance Guarantee Test Run.
* **Financial Data**
* Rs. 9.44 crore has been done free of cost for modifications implemented by Licensor
**Impact Analysis**
**Stakeholder:** Government
**Impact:** Assessed on the effectiveness of the Pradhan Mantri JI-VAN Yojana in promoting biofuels.
**Action Required:** Monitor the progress of the plants and make necessary adjustments to the Yojana.
**Stakeholder:** Indian Oil Corporation Limited (IOCL)
**Impact:** Required to manage and optimize the operation of the Panipat 2G Ethanol Plant. Subject to penalties for delays, but also benefiting from government initiatives.
**Action Required:** Address the operational challenges, monitor production, and continue working with Praj Industries. Ensure completion of the Performance Guarantee Test Run to release withheld funds.
**Stakeholder:** Other Public Sector Oil Companies (Numaligarh Refinery Limited, Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited)
**Impact:** Responsible for the establishment and operation of their respective 2G ethanol plants.
**Action Required:** Ensure smooth operation of their plants and compliance with relevant regulations.
**Stakeholder:** Praj Industries (Technology Provider)
**Impact:** Involved in addressing technical and operational issues at the IOCL Panipat plant. Subject to potential withholding of fees if performance guarantees are not met.
**Action Required:** Collaborate with IOCL to resolve plant issues and meet the Performance Guarantee Test Run requirements.
**Stakeholder:** Contractors and Equipment Suppliers
**Impact:** Subject to penalties under the Price Reduction Schedule (PRS) for delays in delivery and execution of the 2G ethanol plant at Panipat.
**Action Required:** Avoid future delays and comply with contractual obligations.
Key Entities Referenced
Pradhan Mantri JI-VAN Yojana: A scheme to provide financial assistance for setting up Advanced Biofuels projects in the country.
Indian Oil Corporation Limited (IOCL): A public sector oil company that established a 2G commercial Ethanol Plant at Panipat, Haryana.
Panipat: Location of the 2G commercial Ethanol Plant set up by IOCL in Haryana.
2G Ethanol Plant: Plants that produce ethanol from lignocellulosic biomass and other renewable feedstock.
Ministry of Petroleum & Natural Gas: The ministry responsible for matters related to the petroleum and natural gas sector, to which the question is addressed.
LOK SABHA
UNSTARRED QUESTION No. 1075
TO BE ANSWERED ON 5th February, 2026
PERFORMANCE OF 2G ETHANOL PLANTS
†1075. SHRI LAXMIKANT PAPPU NISHAD:
पे(cid:7069)ोिलयम और (cid:7079)ाकृितक गैस म(cid:7074)ं ी
Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:
(a) the approved and actual capital cost and item-wise expenditure details of the 2G ethanol
plant established at the Indian Oil Corporation Limited (IOCL) Panipat Refinery based
on Praj Industries technology;
(b) the installed production capacity of the plant, the commercial production start date and
year-wise/quarter-wise actual production and capacity utilisation percentage since
commissioning of the said plant;
(c) whether the Government is aware that the production of the Panipat 2G ethanol plant has
consistently remained below its design capacity and if so, the technical and operational
reasons therefor;
(d) the details of capacity cost commissioning date and actual production of 2G ethanol
plants established by other Public Sector Oil Companies at locations including Bathinda,
Odisha, Assam and Haryana, if so, the details thereof, plant-wise; and
(e) whether any penalties have been imposed on the technology providers or Engineering
Procurement and Construction (EPC) contractors for failure to achieve targets despite
performance guarantees, if so, the details thereof?
ANSWER
पे(cid:7069)ोिलयम और (cid:7079)ाकृितक गैस म(cid:7074)ं ालय म(cid:7286) रा(cid:6996)यम(cid:7074)ं ी
((cid:7088)ी सुरेश गोपी)
MINISTER OF STATE IN THE MINISTRY OF PETROLEUM & NATURAL GAS
(SHRI SURESH GOPI)
(a) to (c): Government have notified the “Pradhan Mantri JI-VAN (Jaiv Indhan – Vatavaran
Anukool fasal awashesh Nivaran) Yojana” 2019, amended in 2024, to provide financial
assistance for setting up Advanced Biofuels projects in the country using lignocellulosic biomass
and other renewable feedstock.
Under this scheme, the 2G commercial Ethanol Plant set up by Indian Oil Corporation Limited
(IOCL) at Panipat (Haryana) commenced commercial production on 11.11.2023. The approved
capital cost of the project is Rs. 909 crore ±10%, while the cumulative expenditure incurred by
IOCL stands at Rs 984 crore. The plant has installed capacity of 100 Kilo Litre Per Day (KLPD)
of ethanol production. The item-wise major package details including expenditure and quarter-
wise, year-wise production of the plant are provided at Annexure-I and Annexure-II,
respectively.The 2G ethanol plant is the first of its kind installed in India. The variability of straw quality in
terms of moisture and silica content affects the downstream treatment section and creates
associated mechanical issues. IOCL is continuously working in close coordination with
technology provider, M/s Praj Industries, to resolve these issues in the plant. In December 2025,
plant operated at 62% of its design capacity after carrying out recent modifications during the
period November-December, 2025, to address process and mechanical challenges. As experience
of ongoing and executed projects is gained, these plants will stabilize.
(d) 2G ethanol Plant of commercial scale of other Public Sector Oil Companies have also
been approved under the PM JI-VAN Yojana. These are (i) 185 KLPD bamboo-based 2G
ethanol plant at Numaligarh, Assam, by Numaligarh Refinery Limited through its joint venture
company, Assam Bio Ethanol Private Limited (ABEPL), inaugurated in September, 2025, (ii) a
100 KLPD paddy-straw-based 2G ethanol plant at Bargarh, Odisha by Bharat Petroleum
Corporation Limited (BPCL) and (iii) another 100 KLPD paddy-straw-based 2G ethanol plant at
Bathinda, Punjab by Hindustan Petroleum Corporation Limited (HPCL).
(e) Indian Oil Corporation Limited (IOCL) has deducted Rs. 2.84 crore under Price
Reduction Schedule (PRS) as per the Contract against various contractors and equipment
suppliers of their 2G ethanol Plant at Panipat for delay in delivery and execution. IOCL has also
withheld Rs. 5.25 crore of the total license fee of Rs. 10.5 crore payable to the technology
provider as successful completion of Performance Guarantee Test Run of the plant has not been
met as per the terms of Agreement. In addition, modifications implemented by Licensor costing
Rs. 9.44 crore has been done free of cost.
*****ANNEXURE-I
ANNEXURE REFERRED TO IN REPLY OF PART (a) to (c) OF THE LOK SABHA
UNSTARRED QUESTION NO. 1075 TO BE ANSWERED ON 05.02.2026 REGARDING
“PERFORMANCE OF 2G ETHANOL PLANTS” ASKED BY SHRI LAXMIKANT
PAPPU NISHAD.
Item-wise break up of Expenditure of Panipat 2G Refinery plant:
Category Total (Rs. Cr.)
Electrical, Instrumentation, Piping 92
Catalyst and chemicals 10
Equipment (Filter Press, Material Handling System, Proprietary 430
equipment, Biomass Handling Equipment etc.
Civil, E&I, Mechanical Erection 319
Licensor and Engineering, Procurement & Construction Management 43
(EPCM) Fee
Office Equipment & Furniture 1
Roads & Buildings 30
Site Development 6
Statutory Clearance 4
Construction Period Expenses (CPE), Interest During Construction 49
(IDC), Miscellaneous charges
Grand Total 984ANNEXURE-II
ANNEXURE REFERRED TO IN REPLY OF PART (a) to (c) OF THE LOK SABHA
UNSTARRED QUESTION NO. 1075 TO BE ANSWERED ON 05.02.2026 REGARDING
“PERFORMANCE OF 2G ETHANOL PLANTS” ASKED BY SHRI LAXMIKANT
PAPPU NISHAD.
Details of quarter-wise and year-wise production of ethanol at IOCL’s 2G Ethanol Plant,
Panipat:
Quarterly Ethanol
YearlyEthanol Production
Quarter Production
(in kilo Litre)
(in kilo Litre)
685.2
October-December, 2023 129.0
(FY: 2023-24
January-March, 2024 556.2 For 6 months)
April-June, 2024 577.3
2,076.6
July-September, 2024 430.2
October-December, 2024 424.0
(FY:2024-25)
January-March, 2025 645.0
April-June, 2025 642.7 1,393.5
July-September, 2025 176.7
(FY:2025-26
October-December, 2025 574.0
for 9 months)
*****