Ethanol Consumption for Fuel in India

Ethanol Consumption for Fuel in India

India has 300+ distilleries which produce nearly 4.5 billion litres of Ethanol yearly. Around 60% of the distilleries are major ethanol producers, having combined production capacity of 2.2 billion litres. In India,ethanol is a secondary product of sugarcane processing industry where molasses is converted into ethanol using a biochemical reactor and distillation columns.Other countries directly process sugarcane or corn for ethanol production. Last year, India experienced a shortage in molasses due to lower supply of sugarcane from farmers. This drop was mainly due to low rainfall and falling prices of sugarcane which further discouraged the farmers to cultivate sugarcane. Hike in crude oil prices have taken a toll on Indian oil companies and general public.To mitigate the issue of lower sugarcane price and higher international crude oil prices, government of India has decided to increase the blend rate of ethanol in fuel from 4% to around 8% till 2030. Government promised to provide soft loans for ethanol plant construction to speed up the process. Prismane Consulting estimates the blend rate to rise to 5.5% in 2025 at a CAGR of 15% in forecast period.

Use of Ethanol for Fuel Blending (2011-2025)

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