Govt mulls diverting 90 lakh tonnes of FCI broken rice for ethanol

In response to rising global crude oil prices, the Centre is preparing to channel around 90 lakh tonnes of broken rice from the Food Corporation of India (FCI) towards ethanol production starting next year. The move is part of a broader strategy to strengthen domestic biofuel supply and reduce dependence on fossil fuels.

The Ministry of Food is set to approach the Cabinet with a proposal to cut the share of broken rice distributed under the Public Distribution System (PDS) from 25% to 10%. According to Food Secretary Sanjeev Chopra, this adjustment would release substantial quantities of broken rice annually for use in the ethanol industry.

India has already achieved 20% ethanol blending in petrol, a sharp rise from 1.5% in 2013. This progress has resulted in foreign exchange savings of over ₹1.63 lakh crore and reduced crude oil imports by 277 lakh metric tonnes since 2014. The government is now shifting focus from supply-side interventions to enhancing ethanol availability, with options such as increasing blending beyond 20%, introducing ethanol blending in diesel, and promoting flex-fuel vehicles under consideration.

Currently, broken rice accounts for a quarter of the grains distributed free to nearly 80 crore beneficiaries under the food security scheme. Under the proposed revision, the surplus rice—out of the annual 360–370 lakh tonnes distributed—will be auctioned to ethanol producers, animal feed manufacturers, and other users. A pilot of the initiative has already been conducted in five states.

From next year, FCI will discontinue supplying whole-grain rice to distilleries, with broken rice becoming the primary feedstock for ethanol production. Chopra also urged distilleries to accelerate lifting existing allocations, noting that only 21 lakh tonnes out of 52 lakh tonnes earmarked this year have been utilised so far, with discounted rates valid only until June 30.