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The Ministry of Petroleum and Natural Gas in India is developing a mechanism to manage an excess ethanol capacity of approximately 17,000 million litres in collaboration with the Ministry of Food. Current annual ethanol procurement by oil marketing companies is 11,000 million litres for a 20% blending with petrol.

Discussions include easing ethanol exports and enhancing biofuel blending. In 2024-25, ethanol blending reached over 1,000 crore litres, achieving an average of 19.24%. For the 2025-26 supply year, only 2,890 million litres from sugar-based sources has been allocated, while 7,610 million litres comes from grain-based sources.

The biofuel programme has enabled significant payments to farmers and foreign exchange savings. The Roadmap for Ethanol Blending in India 2020-25 indicates no adverse effects on engine health from E20 blending, with significant reductions in GHG emissions from ethanol compared to petrol.