ISMA demands ethanol import ban

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has urged the central government to restrict imports of ethanol intended for fuel blending, warning that such a move could disrupt domestic investments and delay payments to sugarcane farmers.

The appeal comes at a time when India and the United States are negotiating a Bilateral Trade Agreement (BTA), with the US reportedly seeking market access for its grain-based ethanol.

In a letter to Commerce and Industry Minister Piyush Goyal, ISMA cautioned that allowing ethanol imports for fuel use would undermine the significant progress India has made in expanding domestic ethanol production. The industry has attracted over Rs 40,000 crore in investments since 2018, with ethanol production capacity rising by more than 140% during this period.

ISMA had said in its communication to the Centre, “If imports of ethanol for fuel is allowed then it would dilute the significant gains made in domestic capacity building, investment, and job creation.”

India has already achieved a 19% ethanol blending rate in petrol and is on course to reach the 20% target in the 2024-25 supply year, a year ahead of the original deadline. ISMA credited this progress to supportive government policies and the current restrictions on fuel ethanol imports.

The ISMA demand has come at a time when the Central Government looks like preparing to raise the ethanol blending target to 27%. The new fuel blend, expected to be named E27, marks the next phase in India’s push for cleaner and more sustainable energy sources.

To fast-track this transition, the Bureau of Indian Standards (BIS) has been directed to urgently formulate specifications and standards for E27 fuel. The first round of stakeholder consultations on these norms is scheduled for next week.

At the same time, the Ministry of Road Transport and Highways has tasked the Automotive Research Association of India (ARAI) — the country’s top vehicle testing and certification body — with conducting research into engine modifications needed to support vehicles running on petrol blended with 27% ethanol. The Centre has denied these as mere speculations but the industry looks hopeful that the new target might become a policy soon.