New Delhi, May 15: India’s installed ethanol production capacity has risen to around 2,000 crore litres, surpassing current domestic demand, according to a recent report highlighting the rapid expansion of the country’s biofuel sector.
The report notes that the sharp increase in capacity has been driven by strong policy support for ethanol blending, expansion of distilleries, and increased participation from the sugar and grain-based ethanol industries.
Officials and industry sources said the higher capacity reflects India’s progress toward its ethanol blending targets aimed at reducing dependence on fossil fuels and improving energy security.
However, the report also indicates that current demand has not fully matched the pace of capacity addition, leading to concerns about underutilisation in certain regions and segments of the industry.
Experts suggest that better coordination between production planning, procurement policies, and blending requirements will be key to balancing supply and demand in the sector.
Despite the gap, the expansion is seen as a positive step toward strengthening India’s biofuel ecosystem and supporting long-term sustainability goals in the energy sector.