Executive Summary:
The document details the Indian government's initiatives to promote biofuel blending, specifically ethanol in petrol and biodiesel in diesel, under the National Policy on Biofuels. It highlights the progress of the Ethanol Blended Petrol (EBP) Programme, support for biofuel production units including those in Bhiwani Mahendergarh Lok Sabha Constituency, and efforts to involve farmers in the biofuel supply chain, including the use of crop residue. The statement covers progress till July 31, 2025, and outlines various schemes and measures implemented to boost biofuel production and usage.
Key Points / Main Content:
Ethanol Blended Petrol (EBP) Programme:
* Promotes ethanol blending in petrol to enhance environmental sustainability, reduce crude oil import dependence, and support the domestic agriculture sector.
* EBP Programme has resulted in payments of over Rs. 1,25,000 crore to farmers from ESY 2014-15 up to July 2025.
* Savings of more than Rs. 1,44,000 crore in foreign exchange, net CO2 reduction of about 736 lakh metric tonnes and substitution of more than 244 lakh metric tonnes of crude oil.
* Achieved 10% ethanol blending in petrol by June 2022 and reached 19.05% as of July 31, 2025, with 19.93% achieved in July 2025.
Support for Ethanol Production:
* Expansion of feedstock for ethanol production.
* Administered price mechanism for ethanol procurement under the EBP Programme.
* Lowered GST rate to 5% for ethanol for the EBP Programme.
* Introduction of Ethanol Interest Subvention Schemes (EISS) during 2018-22 and a dedicated subvention scheme for Cooperative Sugar Mills.
* Long Term Offtake Agreements (LTOAs) between OMCs and Dedicated Ethanol Plants.
* Promotion of multimodal transportation of ethanol and increased storage capacity.
Pradhan Mantri JIVAN Yojana:
* Aims to establish advanced biofuels projects using lignocellulosic biomass and other renewable feedstocks, including crop residue.
* Objectives include providing income to farmers for agriculture residues, creating employment, addressing environmental pollution, and reducing dependence on crude oil import.
* Total financial outlay of Rs. 1,969.50 crore, with Rs. 1,800 crore for commercial-scale and Rs. 150 crore for demonstration-scale advanced biofuel projects.
Biodiesel Promotion:
* Prescribing indicative target of blending of biodiesel in diesel.
* Direct sale of biodiesel allowed under the National Policy on Biofuels.
* Guidelines for the sale of biodiesel for blending with high-speed diesel were notified in 2019.
* Reduction of GST rate for biodiesel procurement for blending from 12% to 5%.
Impact Analysis:
Farmers:
* Impact: Increased income through the supply of ethanol and agricultural residues for biofuel production.
* Action Required: Participate in biofuel supply chains, utilize schemes like PM JIVAN Yojana, and supply agricultural residues for biofuel production.
Biofuel Producers:
* Impact: Increased demand and financial support for establishing and expanding biofuel production units.
* Action Required: Establish or expand biofuel production facilities, leverage government schemes like EISS and PM JIVAN Yojana, and enter into Long Term Offtake Agreements (LTOAs) with OMCs.
Oil Marketing Companies (OMCs):
* Impact: Required to increase ethanol and biodiesel blending percentages in petrol and diesel, respectively.
* Action Required: Enter into LTOAs with ethanol plants, enhance ethanol storage and transportation infrastructure, and achieve the targeted blending percentages.
Environment:
* Impact: Reduced carbon emissions and pollution through the substitution of fossil fuels with biofuels.
* Action Required: Support and promote the use of biofuels to reduce the environmental impact of the transportation sector.
Government:
* Impact: Reduction in crude oil import dependence and foreign exchange savings.
* Action Required: Continue to implement and monitor biofuel promotion policies, provide financial support to biofuel projects, and promote the adoption of biofuels across the country.
Bhiwani Mahendergarh Lok Sabha Constituency:
* Impact: Benefited from the support for ethanol production units.
* Action Required: Participate in and benefit from the various schemes to support the production of ethanol, including the expansion of feedstock and establishment of new units.
Key Entities Referenced
National Policy on Biofuels: A government policy document promoting the use of biofuels as an alternative to petroleum products.
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.
Bhiwani Mahendergarh Lok Sabha Constituency: A Lok Sabha constituency where biofuel production and related initiatives are being supported.
Pradhan Mantri JIVAN Jaiv Indhan Vatavaran Anukool Fasal Awashesh Nivaran Yojana: A government scheme to establish advanced biofuels projects using lignocellulosic biomass and other renewable feedstocks, including crop residue.
Ethanol Interest Subvention Schemes EISS: Government schemes introduced during 2018-22 to provide financial assistance for ethanol production.
Public Sector Oil Marketing Companies OMCs: These companies achieved the target of 10% Ethanol blending in petrol in June 2022.
Long Term Offtake Agreements LTOAs: Agreements between OMCs and Dedicated Ethanol Plants, multimodal transportation of ethanol to enhance availability of ethanol
SHRI HARDEEP SINGH PURI: Minister of Petroleum and Natural Gas
LOK SABHA
STARRED QUESTION No. *404
TO BE ANSWERED ON 21st August, 2025
PROMOTION OF BIOFUEL BLENDING
*404. SHRI DHARAMBIR SINGH
पे(cid:7069)ोिलयम और (cid:7079)ाकृितक गसै म(cid:7074)ं ी
Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:
(a) whether the Government is promoting biofuel blending of petrol and diesel and if so, the
details thereof;
(b) the details of support to biofuel producing units across the country along with the steps
taken/to be taken by the Government to involve farmers in biofuel supply chains;
(c) whether the Government has any plans to encourage the use of crop residue for biofuel and
if so, the details thereof; and
(d) whether such initiatives are likely to be introduced in Bhiwani-Mahendragarh Lok Sabha
Constituency and if so, the details thereof?
ANSWER
पे(cid:7069)ोिलयम और (cid:7079)ाकृितक गसै म(cid:7074)ं ी
((cid:7088)ी हरदीप (cid:7410)सह पुरी)
MINISTER OF PETROLEUM & NATURAL GAS
(SHRI HARDEEP SINGH PURI)
(a) to (d): A Statement is laid on the Table of the House.STATEMENT REFERRED TO IN REPLY TO PART (a) TO (d) OF THE LOK SABHA
STARRED QUESTION NO. *404 TO BE ANSWERED ON 21.08.2025 REGARDING
‘PROMOTION OF BIOFUEL BLENDING’.
(a) to (d): The promotion of use of biofuels as a suitable alternative to petroleum products has
been done 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. It reduces dependence on crude oil
imports while saving foreign exchange and promotes the domestic agriculture sector. 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, 12.06% in ESY 2022-23 and
14.60% in ESY 2023-24. Further, for the ongoing ESY 2024-25, the blending percentage has
gone up to 19.05% as on 31.07.2025. During the month of July, 2025, Ethanol blending of
19.93% has been achieved.
In order to support the production of ethanol across the country including Bhiwani -
Mahendergarh Lok Sabha Constituency, the Government have taken several steps which inter-
alia includes expansion of feedstock for Ethanol production, administered price mechanism for
Ethanol procurement under the Ethanol Blended Petrol (EBP) Programme, lowered GST rate to
5% for Ethanol for EBP Programme, introduction of various Ethanol Interest Subvention
Schemes (EISS) during 2018-22, 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, Long Term Offtake Agreements (LTOAs) between OMCs and
Dedicated Ethanol Plants, multimodal transportation of ethanol to enhance availability of ethanol
and increasing ethanol storage capacity along with other allied infrastructure for handling of
higher blends of ethanol.
To further facilitate ethanol production, Government have notified the "Pradhan Mantri
JI-VAN (Jaiv Indhan- Vatavaran Anukool Fasal Awashesh Nivaran) Yojana" in 2019, amended
in 2024, with the objectives to establish advanced biofuels projects in the country using
lignocellulosic biomass and other renewable feedstocks including crop residue, provide
remunerative income to farmers for their otherwise waste agriculture residues, create rural and
urban employment opportunities, address concerns of environmental pollution caused by
burning of biomass/agriculture residue, reduce soil and water pollution from municipal solid
waste, contribute to Swacch Bharat Mission, help in meeting the target envisaged in Ethanol
Blended Petrol (EBP) programme, reduce dependence on crude oil import, etc. The total
financial outlay for PM JI-VAN is 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 advanced
biofuel projects.
Government have also taken several measures to support use of biodiesel, which inter-
alia include prescribing indicative target of blending of biodiesel in diesel / direct sale of
biodiesel under the National Policy on Biofuels, notifying of “Guidelines for sale of biodiesel for
blending with high speed diesel for transportation purposes-2019”, reduction of GST rate for
procurement of biodiesel for blending programme from 12% to 5%, etc.
*****