Accelerated Implementation of the Ethanol Blended Petrol (EBP) Programme: UPSC Current Affairs Story Arc

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GS-2GS-36 events · 2025-03-08 → 2025-08-18

India has pulled off a decade's work in five years, achieving 20% ethanol blending (E20) by 2025 and saving a staggering ₹1.40 lakh crore in foreign exchange. However, this triumph comes with a catch: 9% of the nation's sugarcane output is now fueling cars instead of feeding people.

Overview

The Ethanol Blended Petrol (EBP) Programme is India's strategic push to reduce crude oil import dependency and decarbonize the transport sector. By providing financial subventions to distilleries and allowing surplus Food Corporation of India (FCI) rice to be converted into fuel, the government successfully scaled ethanol production capacity to 1,600 crore litres. This arc traces the acceleration of blending targets—from an initial goal of 20% by 2030 to achieving it in 2025, and subsequently setting a more ambitious 30% target for 2030. It represents a complex intersection of energy security, agricultural support, and environmental commitments, while raising critical questions about groundwater sustainability and the 'food vs. fuel' debate.

How This Story Evolved

Financial subvention schemes are established to build capacity (Item 9 & 8) → Surplus grain stocks are allocated to ensure production feedstock (Item 10) → Progress updates confirm the feasibility of the 2025 target (Item 5) → The 20% milestone is officially achieved ahead of schedule (Item 6), leading to a retrospective analysis of challenges and the setting of a new 30% target (Item 3)

  1. 2025-03-08: Modified Ethanol Interest Subvention Scheme
    More details

    UPSC Angle: Ethanol Blended with Petrol (EBP) Programme target of 20% by 2025.

    Key Facts:

    • Ethanol Blended with Petrol (EBP) Programme
    • Target: 20% blending of ethanol with petrol by 2025
    • Ethanol interest subvention schemes: July 2018 to April 2022
  2. 2025-04-19: Drishti IAS: Ethanol Blending Program Savings
    More details

    UPSC Angle: EBP saved ₹1.06 lakh crore in forex, reduced CO₂ emissions.

    Key Facts:

    • Ethanol Capacity: 1,600 crore litres (by 2024)
    • Foreign Exchange Savings: Rs. 1.06 lakh crore
    • COâ‚‚ Emissions Reduced: 544 lakh metric tons
  3. 2025-05-13: India Approves Additional Rice for Ethanol Production
    More details

    UPSC Angle: India approves additional rice for ethanol production.

    Key Facts:

    • Union Government
    • 2.8 million tonnes rice
    • Food Corporation of India (FCI)
    • ethanol production
    • Ethanol Supply Year (ESY) 2024–25
    • 5.2 million tonnes total allocation
    • EBP programme
    • Additional rice approved for ethanol production: 2.8 million tonnes
    • Source: Food Corporation of India (FCI) stock
    • Total allocation for Ethanol Supply Year (ESY) 2024–25: 5.2 million tonnes
    • E20 target achieved: 20% ethanol blending in petrol by 2025
    • New target: 30% blending by 2030
  4. 2025-06-18: Down to Earth: India's Ethanol Blending Targets
    More details

    UPSC Angle: India's ethanol blending target is 20% by 2025-26.

    Key Facts:

    • Ethanol blending target: 20% by 2025–26
    • Ethanol raw materials: sugarcane juice, sugar syrup, damaged food grains, molasses
    • Buffer stock levels and potential ethanol yields from surplus FCI grain evaluated
  5. 2025-07-25: India Achieves 20% Ethanol Blending Target
    More details

    UPSC Angle: India achieves 20% ethanol blending target ahead of schedule.

    Key Facts:

    • Achieved 20% ethanol blending in petrol in 2025.
    • Target was achieved five years ahead of the 2030 target.
    • Ethanol blending increased from 1.5% in 2014 to 20% in 2025.
    • ₹1.36 lakh crore saved in foreign exchange by reducing crude oil imports.
    • Avoided 698 lakh tonnes of COâ‚‚ emissions.
    • Ethanol Interest Subvention Schemes (EISS) (2018–22) supported ethanol units.
  6. 2025-08-18: India advances ethanol blending target but faces challenges
    More details

    UPSC Angle: India achieved 20% ethanol blending (E20) target by 2025.

    Key Facts:

    • 20% ethanol blending (E20) achieved in 2025
    • National Policy on Biofuels
    • 700 lakh tonnes CO2 emission reduction
    • ₹1.40 lakh crore saved in oil imports since FY15
    • Sugarcane output diverted to fuel: 9%
    • ₹1.20 lakh crore paid to farmers since FY15
    • 2023: E20 compatibility stickers on vehicles
    • OECD-FAO estimates 22% of sugarcane will go to ethanol by 2034
    • Food Corporation of India allocated 5.2 million tonnes of rice for ethanol in 2024-25
    • Corn imports surged to 9.7 lakh tonnes in 2024-25
    • Sugarcane acreage: ~57 lakh hectares
    • Ethanol blending reached 20% in 2025, five years ahead of schedule
    • Ethanol output grew from 40 crore litres in 2014 to 670 crore litres in 2024
    • Ethanol blending has reduced carbon dioxide emissions by 700 lakh tonnes
    • EVs made up only 7.6% of vehicle sales in 2024

Genesis

Trigger

The notification of various ethanol interest subvention schemes between July 2018 and April 2022.

Why Now

The government sought to address the twin problems of sugar surpluses (which depressed farmer prices) and a ballooning oil import bill, enabled by the 2018 National Policy on Biofuels.

Historical Context

India's ethanol journey began in 2003 with a modest 5% mandate in 9 states, but it stagnated for years due to inconsistent feedstock supply and pricing disputes between oil companies and sugar mills.

Key Turning Points

  1. [2025-05-13] Approval of additional 2.8 million tonnes of FCI rice for ethanol production.

    It signaled that India was willing to prioritize 'fuel security' using food stocks to ensure the 20% target was met.

    Before: Reliance primarily on sugarcane; After: Heavy reliance on surplus food grains to maintain the E20 momentum.

  2. [2025-07-25] Official Achievement of 20% Ethanol Blending Target.

    Confirmed the success of the EBP programme 5 years ahead of schedule.

    Before: 2030 was the deadline; After: India moved the goalpost to a 30% blending target by 2030.

Key Actors and Institutions

NameRoleRelevance
Union GovernmentPolicy and Financial ArchitectApproved the additional allocation of 2.8 million tonnes of FCI rice in May 2025 to ensure feedstock availability for the ESY 2024–25.
Food Corporation of India (FCI)Stock ManagerProvided the surplus grain buffer (totaling 5.2 million tonnes for 2024-25) necessary to meet production targets when sugarcane supply was insufficient.

Key Institutions

  • Ministry of Petroleum and Natural Gas (MoPNG)
  • Food Corporation of India (FCI)
  • Oil Marketing Companies (OMCs)
  • National Federation of Cooperative Sugar Factories

Key Concepts

Ethanol Blended Petrol (EBP)

A strategy where ethanol (an anhydrous ethyl alcohol) is mixed with petrol to reduce the amount of petroleum used, thereby lowering emissions and imports.

Current Fact: India increased its blending percentage from 1.5% in 2014 to 20% in 2025.

Interest Subvention

A form of financial help where the government pays a part of the interest on loans taken by private entities to build infrastructure.

Current Fact: Interest subvention schemes were notified between July 2018 and April 2022 to boost ethanol production capacity to 1,600 crore litres.

Ethanol Supply Year (ESY)

The annual cycle (typically November to October) used by the government and OMCs to manage ethanol procurement and blending targets.

Current Fact: For ESY 2024-25, the total rice allocation for ethanol reached 5.2 million tonnes.

What Happens Next

Current Status

India has officially achieved 20% ethanol blending (E20) as of mid-2025, reaching the milestone five years ahead of the original 2030 deadline.

Likely Next

Expansion of the target to 30% blending by 2030 and a shift in focus toward 2nd Generation (2G) ethanol plants that use non-food biomass.

Wildcards

Possible 'Food vs. Fuel' crisis if a weak monsoon reduces sugar/grain yields, or a faster-than-expected transition to Electric Vehicles (EVs) making high blending targets redundant.

Why UPSC Cares

Syllabus Topics

  • Government policies and interventions for development in various sectors
  • Infrastructure: Energy
  • Environment: Conservation, environmental pollution and degradation

Essay Angles

  • The Food vs. Fuel Dilemma: Navigating India's Energy Security
  • Sustainability vs. Speed: The hidden costs of rapid policy implementation
  • Biofuels as a bridge to a Net Zero India

Prelims Likely: Yes

Mains Likely: Yes

Trend Signal: rising

Exam Intelligence

Previous Year Question Connections

  • Tested raw materials for biofuel production (Cassava, damaged wheat, etc.) — Directly relates to the 2025 expansion of feedstocks to include 5.2 million tonnes of FCI rice and damaged grains.
  • Who benefits from 10% ethanol blending (Sugar industry) — The arc shows the shift from 10% to 20% and the diversification of beneficiaries to grain farmers.
  • Feedstock comparison between USA (corn) and Brazil (sugarcane) — India is now following a hybrid model of both sugarcane and grain-based (like USA/corn) feedstock.

Prelims Angles

  • Feedstocks allowed under National Policy on Biofuels 2018 (Sugarcane juice, B-molasses, broken rice, maize).
  • Target dates for E20 (2025) and the new E30 (2030).
  • Economic impact: ₹1.40 lakh crore foreign exchange savings and 700 lakh tonnes CO2 reduction.

Mains Preparation

Sample Question: Critically analyze India's success in achieving the 20% ethanol blending target five years ahead of schedule. Does the diversion of food grains for fuel production pose a threat to India's long-term food security?

Answer Structure: Intro: Define EBP and the E20 milestone. Body 1: Drivers of success (Subvention schemes, feedstock diversification). Body 2: Benefits (Forex savings, farmer income, carbon reduction). Critical Analysis: Issues (Water intensity of sugarcane, food-fuel nexus, vehicle engine modifications). Way Forward: Transition to 2G ethanol and balance with EV adoption.

Essay Topic: Energy Security and Food Security: The Two Pillars of a Resilient India

Textbook Connections

Environment, Shankar IAS Academy (ed 10th) > Chapter 23: India and Climate Change > p. 316

Explains the 2023 amendment to the National Policy on Biofuels which advanced the 20% target from 2030 to 2025.

Gap: The textbook mentions the 2025 target as a 'goal'; the arc confirms it as an 'achieved fact' and introduces the new 30% target.

Indian Economy, Nitin Singhania (ed 2nd) > Chapter 15: Infrastructure > p. 453

Details the categorization of biofuels and the list of eligible feedstocks like damaged food grains.

Gap: Does not account for the massive 5.2 million tonne scale of grain diversion now being authorized for ESY 2024-25.

Quick Revision

  • E20 target achieved in 2025, five years ahead of the original 2030 deadline.
  • New target set: 30% ethanol blending by 2030.
  • Total foreign exchange savings since FY15: ₹1.40 lakh crore.
  • Carbon emission reduction: 700 lakh metric tons achieved.
  • Current feedstock diversion: 9% of total sugarcane output.
  • FCI rice allocation for ESY 2024–25: 5.2 million tonnes (including 2.8 million tonnes additional).
  • Ethanol production capacity by 2024: 1,600 crore litres.
  • Blending growth: From 1.5% in 2014 to 20% in 2025.

Key Takeaway

India's rapid attainment of the E20 target proves that aggressive financial subventions and feedstock flexibility can accelerate energy transitions, but the resulting 30% target will test the limits of India's food-fuel balance and water resources.

All Events in This Story (6 items)

  1. 2025-03-08 [Schemes & Programs] — Modified Ethanol Interest Subvention Scheme
    Under the Ethanol Blended with Petrol (EBP) Programme, the government has fixed the target of 20% blending of ethanol with petrol by 2025 and has notified various ethanol interest subvention schemes from July 2018 to April 2022.
    More details

    UPSC Angle: Ethanol Blended with Petrol (EBP) Programme target of 20% by 2025.

    Key Facts:

    • Ethanol Blended with Petrol (EBP) Programme
    • Target: 20% blending of ethanol with petrol by 2025
    • Ethanol interest subvention schemes: July 2018 to April 2022
  2. 2025-04-19 [Economy] — Drishti IAS: Ethanol Blending Program Savings
    By 2024, ethanol production capacity reached 1,600 crore litres. The Ethanol Blending Program (EBP) saved Rs. 1.06 lakh crore in foreign exchange by reducing crude oil imports and helped reduce COâ‚‚ emissions by 544 lakh metric tons.
    More details

    UPSC Angle: EBP saved ₹1.06 lakh crore in forex, reduced CO₂ emissions.

    Key Facts:

    • Ethanol Capacity: 1,600 crore litres (by 2024)
    • Foreign Exchange Savings: Rs. 1.06 lakh crore
    • COâ‚‚ Emissions Reduced: 544 lakh metric tons
  3. 2025-05-13 [Economy] — India Approves Additional Rice for Ethanol Production
    The Union Government has approved an additional 2.8 million tonnes of rice from the Food Corporation of India (FCI) stock for ethanol production. This raises the total allocation for the Ethanol Supply Year (ESY) 2024–25 to 5.2 million tonnes. India has achieved its E20 target, blending 20% ethanol in petrol by 2025, and now aims for 30% blending by 2030.
    More details

    UPSC Angle: India approves additional rice for ethanol production.

    Key Facts:

    • Union Government
    • 2.8 million tonnes rice
    • Food Corporation of India (FCI)
    • ethanol production
    • Ethanol Supply Year (ESY) 2024–25
    • 5.2 million tonnes total allocation
    • EBP programme
    • Additional rice approved for ethanol production: 2.8 million tonnes
    • Source: Food Corporation of India (FCI) stock
    • Total allocation for Ethanol Supply Year (ESY) 2024–25: 5.2 million tonnes
    • E20 target achieved: 20% ethanol blending in petrol by 2025
    • New target: 30% blending by 2030
  4. 2025-06-18 [Economy] — Down to Earth: India's Ethanol Blending Targets
    The government aims to achieve 20% ethanol blending in petrol by 2025–26, reducing fossil fuel dependence and carbon emissions. Ethanol can be produced from sugarcane juice, sugar syrup, damaged food grains, and molasses. This program helps reduce carbon emissions, supports farmers, and lowers reliance on imported crude oil.
    More details

    UPSC Angle: India's ethanol blending target is 20% by 2025-26.

    Key Facts:

    • Ethanol blending target: 20% by 2025–26
    • Ethanol raw materials: sugarcane juice, sugar syrup, damaged food grains, molasses
    • Buffer stock levels and potential ethanol yields from surplus FCI grain evaluated
  5. 2025-07-25 [Economy] — India Achieves 20% Ethanol Blending Target
    India has successfully achieved 20% ethanol blending in petrol in 2025, five years ahead of its 2030 target. This marks a major milestone in the country's clean energy transition and reflects progress under the Ethanol Blended Petrol (EBP) Programme. The increased ethanol production resulted in saving nearly ₹1.36 lakh crore in foreign exchange by reducing crude oil imports.
    More details

    UPSC Angle: India achieves 20% ethanol blending target ahead of schedule.

    Key Facts:

    • Achieved 20% ethanol blending in petrol in 2025.
    • Target was achieved five years ahead of the 2030 target.
    • Ethanol blending increased from 1.5% in 2014 to 20% in 2025.
    • ₹1.36 lakh crore saved in foreign exchange by reducing crude oil imports.
    • Avoided 698 lakh tonnes of COâ‚‚ emissions.
    • Ethanol Interest Subvention Schemes (EISS) (2018–22) supported ethanol units.
  6. 2025-08-18 [Economy] — India advances ethanol blending target but faces challenges
    India achieved its target of 20% ethanol blending in petrol (E20) by 2025, five years ahead of schedule, which is expected to reduce emissions and save foreign exchange. However, concerns remain about its impact on vehicle performance, groundwater sustainability, and the transition to electric vehicles.
    More details

    UPSC Angle: India achieved 20% ethanol blending (E20) target by 2025.

    Key Facts:

    • 20% ethanol blending (E20) achieved in 2025
    • National Policy on Biofuels
    • 700 lakh tonnes CO2 emission reduction
    • ₹1.40 lakh crore saved in oil imports since FY15
    • Sugarcane output diverted to fuel: 9%
    • ₹1.20 lakh crore paid to farmers since FY15
    • 2023: E20 compatibility stickers on vehicles
    • OECD-FAO estimates 22% of sugarcane will go to ethanol by 2034
    • Food Corporation of India allocated 5.2 million tonnes of rice for ethanol in 2024-25
    • Corn imports surged to 9.7 lakh tonnes in 2024-25
    • Sugarcane acreage: ~57 lakh hectares
    • Ethanol blending reached 20% in 2025, five years ahead of schedule
    • Ethanol output grew from 40 crore litres in 2014 to 670 crore litres in 2024
    • Ethanol blending has reduced carbon dioxide emissions by 700 lakh tonnes
    • EVs made up only 7.6% of vehicle sales in 2024

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