Nitin Gadkari. File
| Photo Credit: The Hindu

A worker removing weeds from a maize field near Kanchikacherla in NTR district in 2024.
| Photo Credit: RAO G.N.

The story so far: Union Minister Nitin Gadkari said that India will achieve its target of 20% ethanol blending of petrol in the next two months, at least a year ahead of what was originally planned. This would entail the production of nearly 1,100 crore litres of fuel ethanol in one year.

Where will this come from?

The 1,100 crore litres of fuel ethanol will come from sugar and high grade molasses, Food Corporation of India (FCI) rice, broken rice, and maize. India’s ethanol distillery capacity has ramped up to 1,600 crore litres, driven by a range of government incentives and the promise of a stable, lucrative market.

Also read: Understanding ethanol blending 

Sugar is expected to provide some 400 crore litres this ethanol year, according to Deepak Ballani, director general of Indian Sugar and Bio-energy Manufacturers Association. India had closing sugar stocks of around 80 lakh tonnes in October 2024. The projected sugar production for next year is around 315 lakh tonnes out of which 40 lakh tonnes will go to fuel ethanol. Mr. Ballani said that ethanol for non-fuel uses will come from low grade molasses called C Heavy that don’t go into sugar production.

The government recently decided to reduce the price of FCI rice to distilleries from ₹28 to ₹22.5 per kg. The government handout states that some 110 crore litres of ethanol will be produced from FCI rice this ethanol year. This means almost 400 crore litres of fuel ethanol should come from maize. For context, India was producing little or no ethanol from maize until 2020. Besides pure-play grain-based distilleries coming up, some sugar distilleries have modified to dual-feed so in the off-season they can use other feedstock (maize) to produce ethanol.

How is maize playing a role?

India’s maize production is just about enough for traditional needs such as for the poultry sector, livestock feed, starch production and some 10% for human consumption. As the government had imposed curbs on allowing sugar and high quality molasses for ethanol production, maize imports started ramping up in April 2024. From April to June, approx. ₹100 crore worth of maize was imported while, for 2023-24, maize imports were approx. $33 million. Ministry of Commerce figures show that a total of $188 million worth of maize was imported from April to November 2024.

The promise of a steady, lucrative ethanol market has meanwhile goaded many farmers to take to maize cultivation across India. The major maize producing States are Karnataka, Madhya Pradesh, Maharashtra, Andhra Pradesh, Rajasthan, Bihar, and Uttar Pradesh. For the 2024-25 ethanol year, maize output would be some 42 million tonnes out of which nine million can go towards producing the 350 to 400 crore litres of ethanol, H. S. Jat, director ICAR Indian Institute of Maize Research, Ludhiana, said. Citing good prospects for kharif this year, he said importing maize will not be necessary.

Since 2020-21. when ethanol production was almost all sugar-based, maize production had increased by nearly six million tonnes in three years, for potential ethanol use.

As things stand now, maize is cultivated in 10% more area at a higher yield, says Mr. Jat who also expects some diversion from traditional maize uses since supplying to ethanol is more lucrative for farmers. On whether that won’t disrupt the market, Mr. Jat says DDGS (Distiller’s Dried Grains with Solubles), a byproduct of ethanol, can be used for poultry. The long-term sustainability of fuel ethanol would depend on whether the switch to ethanol and stress on maize has a negative impact on production of other foodgrains. Mr. Jat estimates that 100 crore litres of fuel ethanol translates to ₹6,000 crore savings on oil imports and the money going into the internal economy including to farmers. For context, India’s yearly oil import bill is some ₹10.5 lakh crore.