The government has set targets of 10% bioethanol blending of petrol by 2022 and to raise it to 20% by 2030 under the Ethanol Blended Programme (EBP)


  1. In the normal sugar season, about 320 LMT of sugar is produced against a domestic consumption of 260 LMT.
  2. This 60 LMT of surplus sugar which remains unsold, blocks funds of sugar mills to the tune of about Rs. 19,000 crore every year thereby affecting liquidity positions of sugar mills resulting in accumulation of cane price arrears of farmers.
  3. To deal with surplus stocks of sugar, sugar mills are being encouraged by the Government to export sugar, for which the Government has been extending financial assistance.
  4. However, India being a developing country, can export sugar by extending financial assistance for marketing and transport only up to the year 2023 as per WTO
  5. So, as a long term solution to deal with surplus sugar, to improve the sustainability of the sugar industry and to ensure timely payment of cane dues to farmers, the Government has been encouraging diversion of excess sugarcane & sugar to ethanol for supplying to Oil Marketing Companies for blending with petrol.

Benefits of diverting excess sugarcane & sugar to OMCs for ethanol blending:

  • Help reduce import dependency on crude oil.
  • Help promote ethanol as a fuel which is indigenous & non-polluting.
  • Help enhance the income of sugarcane farmers.


Earlier, the Government had fixed a target of 10% blending of fuel-grade ethanol with petrol by 2022 and 20% blending by 2030 but now the Government is preparing a plan to advance the achievement of 20% blending target.


  • However, as the blending targets cannot be achieved only by diverting sugarcane/sugar to ethanol, therefore, the Government is also encouraging distilleries to produce ethanol from other feedstocks like grains, etc. for which the present distillation capacity is not sufficient.
  • Hence, the government is also making efforts to enhance the distillation capacity in the country.


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