The government has allowed sugar mills and distilleries to make ethanol without any limit in the upcoming marketing year 2025-26, which will begin in November. Normally, the Ethanol Supply Year (ESY) runs from November to October.

In a new notification, the Food Ministry said that sugar mills and distilleries can now produce ethanol from sugarcane juice, sugar syrup, B-heavy molasses, and C-heavy molasses in ESY 2025-26 without any restrictions. However, the ministry added that the production of ethanol will be reviewed from time to time with the Petroleum Ministry.

This is to make sure that enough sugar is available in the domestic market and there is no shortage for consumers. In the current ESY 2024-25, the government has already allowed about 40 lakh tonnes of sugar to be diverted for making ethanol.

The Centre has been promoting ethanol blending with petrol under its Ethanol Blended Petrol (EBP) programme. The aim is to reduce dependence on imported fuel, cut pollution, and also help farmers by creating a bigger market for sugarcane. Public Sector Oil Marketing Companies (OMCs) sell petrol mixed with ethanol.

So far, during the ongoing ESY 2024-25, OMCs have achieved an average ethanol blending of 19.05 per cent as of July 31, 2025. This is close to the government’s target. According to the National Policy on Biofuels 2018, which was later updated in 2022, India had set a goal of 20 per cent ethanol blending in petrol by 2030.

But the target has now been advanced, and the government wants to achieve 20 per cent blending by ESY 2025-26 itself. This decision is expected to boost ethanol production, reduce fuel imports, and support the government’s clean energy goals.