Rs 450-cr Rajasthan ethanol project may shift to Madhya Pradesh amidst rising protests

The Rs 450-crore grain-based ethanol project that has been proposed in Rajasthan’s Hanumangarh district is likely to wind up operations as the protests by local farmers and mounting environmental concerns have spiralled up. The project is being developed by Chandigarh-based Dune Ethanol Private Limited at Rathi Khera village in Hanumangarh district.

As per reports, the ethanol project is expected to be relocated to neighbouring state of Madhya Pradesh once all procedural and regulatory formalities are completed.

The ethanol plant, which was cleared in 2023 under the Ashok Gehlot-led government, began facing resistance within weeks of the start of preliminary construction. Farmers in the region strongly opposed the project, alleging that large-scale industrial activity would damage soil fertility, contaminate groundwater and increase pollution levels in an area that is heavily dependent on agriculture.

The agitation intensified in December 2025 after allegations surfaced that effluents and industrial waste generated by the proposed plant could adversely impact farmland and water resources. Protests turned violent at some locations, prompting the authorities to halt work at the site.

Local farmers held that the project posed a serious threat to the ecological balance of the region and to agricultural livelihoods.

The project developer believes that continuing operations in Rajasthan was no longer viable under the prevailing circumstances. The developer holds that the situation on the ground is not supportive and it looks actively for relocation.

Planned with an investment of Rs 450 crore, the ethanol plant was to come up on 40 acres (16.19 hectares) and have a production capacity of 1,320 kilolitres per day of grain-based ethanol. Dune Ethanol Private Limited had also planned a 40-MW co-generation power plant. Rice, maize and agricultural straw were to be sourced locally as raw materials.

The likely exit of the project marks a setback for Rajasthan’s ethanol and industrial expansion plans. While ethanol projects are central to India’s push for higher blending and reduced fossil-fuel dependence, the episode underscores the need to balance clean-energy goals with environmental safeguards, transparency and community consent in agriculture-dominated regions.