India set to be third-largest market for Ethanol Worldwide

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India set to be third-largest market for Ethanol Worldwide

  • India is set to become the third-largest market for ethanol in the world by the year 2026 as per the recent report by the International Energy Agency (IEA).
  • Further, according to a report, India has tripled ethanol demand to an estimated 3 billion litres between the years 2017 and 2021.
  • In terms of biofuels, Asia is set to overtake Europe by the year 2026.


  • It is a renewable biofuel made from biomass.
  • Ethanol is a clear, colorless alcohol made from a variety of biomass materials called feedstocks (the raw materials used to make a product).
  • Ethanol producers mostly use food grains and crops with high starch and sugar content as feedstocks for making ethanol such as corn, sorghum, barley, sugar cane, and sugar beets.
  • The most common ethanol production processes today use yeast to ferment the starch and sugars in corn, sugar cane, and sugar beets.

Ethanol Blending Petrol Programme (EBP Programme)

  • EBP seeks to achieve blending of Ethanol with motor spirit with a view to reducing pollution, conserve foreign exchange and increase value addition in the sugar industry enabling them to clear cane price arrears of farmers.
  • The Central Government has scaled up blending targets from 5% to 10% under the Ethanol Blending Programme (EBP).
  • The procedure of procurement of ethanol under the EBP has been simplified to streamline the entire ethanol supply chain and remunerative ex-depot price of ethanol has been fixed.

Ethanol production, blending and targets

  • 173 Crore litre Ethanol was procured last year and 5 per cent blending was achieved during Ethanol Supply Year (ESY) – 2019-20.
  • The target for ongoing year ESY – 2020-21 is 325 Crore litre which will take the blending to 8.5 per cent.
  • Actual achievement during ESY – 2020-21 so far has been 243 Crore litre, accounting for 8.01 per cent blending.
  • The Government has announced five different rates for Ethanol based on feedstock used for Ethanol production.

International Energy Agency

  • It is a Paris-based autonomous intergovernmental organisation established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.
  • The IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors.
  • In the decades since, its role has expanded to cover the entire global energy system, encompassing traditional energy sources such as oil, gas, and coal as well as cleaner and faster growing ones such as solar PV, wind power and biofuels.