From The Economic Times · Prashant Mukherjee · · 1m 20s
Ethanol Glut in India Drives Search for New Buyers
India's ethanol industry faces a 7 billion litre surplus crisis as it seeks new markets amid oversupply.
In brief
India's ethanol industry faces a 7 billion litre surplus crisis as it seeks new markets amid oversupply. India's ethanol industry has 7 billion litres of unsold ethanol due to oversupply, driving a search for new buyers and alternative markets. Originally reported by The Economic Times.
Ethanol Surplus Crisis
India's ethanol industry faces a severe oversupply crisis with nearly seven billion litres of unused capacity.
Capacity Expansion Outpaces Demand
Rapid capacity expansion has reached 20 billion litres, with another four billion litres added this year.
Market Demand Shortfall
The E20 fuel blending programme requires 11 billion litres annually, while non-fuel sectors consume 3-3.5 billion litres.
Distilleries Operating at 60% Capacity
Distilleries operate at barely 60% capacity, with utilisation expected to remain between 65% and 75% over the next three years.
Government Pauses Higher Blends
The government has paused any move to mandatorily implement higher flexi-fuel blends to E25 or E30 amid consumer backlash.
Differential Pricing Proposal
Ravindra Utgikar, chief sales officer at Wilo India, suggests moving to differential pricing for E10, E20, and E85 blends.
“Instead of mandating a single blend for all, we should move to differential pricing for different ethanol blends, E10, E20, E85”
Export Limitations
India has cleared only second-generation ethanol for exports since September 2025, with small volumes going to Tanzania, Angola, and Kenya.
Bio-IBA Blending Opportunity
Praj Industries plans to blend bio-isobutanol with diesel, potentially creating a project opportunity of more than `3,000 crore.
The takeaway
India's ethanol industry has 7 billion litres of unsold ethanol due to oversupply, driving a search for new buyers and alternative markets.
