The National Policy on Biofuels 2018, amended in 2022, advanced the target of achieving 20 per cent ethanol blending in petrol from 2030 to the Ethanol Supply Year (ESY) 2025-26.

Under the Ethanol Blended Petrol (EBP) Programme, Public Sector Oil Marketing Companies (OMCs) sell ethanol mixed with petrol. In the ongoing ESY 2024-25, OMCs have achieved an average blending rate of 19.05 per cent as of 31 July 2025, with the July 2025 monthly figure reaching 19.93 per cent.

To ensure sufficient feedstock for meeting the 20 per cent blending target, the government has expanded approved ethanol production sources, developed maize clusters around ethanol plants, and launched the ICAR–Indian Institute of Maize Research project to boost maize output in grain-based distillery catchment areas.

The government has also approved the allocation of 5.2 million metric tonnes (MMT) of surplus Food Corporation of India rice each for ESY 2024-25 and ESY 2025-26, and permitted diversion of 4 MMT of sugar for ethanol production during ESY 2024-25.

Other measures include introducing an administered price mechanism for ethanol procurement, reducing the GST rate on ethanol for the EBP Programme to 5 per cent, and launching Ethanol Interest Subvention Schemes (EISS) from 2018 to 2022 for molasses- and grain-based ethanol production. A dedicated scheme for cooperative sugar mills to convert cane-based distilleries into multi-feedstock plants was notified on 6 March 2025.

Further steps comprise Long Term Offtake Agreements between OMCs and dedicated ethanol plants, the Pradhan Mantri JI-VAN Yojana to support advanced biofuel projects, and investment in multimodal ethanol transport, expanded storage capacity, and infrastructure for handling higher ethanol blends.