Modi Govt allows 2.8 million tonnes of rice towards ethanol

The Central Government has approved an additional allocation of 2.8 million tonnes of Food Corporation of India (FCI) rice for ethanol production in the 2024–25 supply year. With the new order, the total earmarked quantity of rice has gone up to 5.2 million tonnes.

According to the official notification from the Ministry of Consumer Affairs, Food and Public Distribution, the allocation applies to the Ethanol Supply Year (ESY) 2024–25, which spans December 2024 to October 2025.

The new allotment by the government builds on the 2.4 million tonnes sanctioned in January, 2025. Of the total allocated rice under the government’s Ethanol Blended Petrol (EBP) programme, distilleries have already lifted about one million tonnes. The issue price remains unchanged at ₹22.50 per kilogram.

The EBP programme aims to curb pollution and reduce reliance on imported fossil fuels. However, it has sparked renewed debate over the use of staple food crops—such as rice, sugarcane, and maize—for ethanol, raising ethical and sustainability concerns. These are all first-generation (1G) biofuel feedstocks, derived directly from food sources. In contrast, second-generation (2G) biofuels, which use non-food biomass like crop residues and industrial waste, are generally considered more sustainable.

The government has held that the decision to release more rice followed a review of buffer stock availability and potential ethanol output from surplus grain. With a conversion efficiency of 470 litres per tonne, the total allocation could yield around 2.45 billion litres of ethanol.

Recently, Petroleum and Natural Gas Minister Hardeep Singh Puri had announced that India achieved 20% ethanol blending in petrol—a significant milestone reached six years ahead of the original target. As per sources, the government is now aiming at 30% ethanol blending by the end of this decade.

According to a report released by Grain Ethanol Manufacturers Association (GEMA) last month, utilizing the annual grain surplus for ethanol production could generate over Rs 35,000 crore in direct payments to farmers raising rural incomes.