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Biofuel Plants and Ethanol Blending


On World Biofuel Day, Prime Minister Modi dedicated the 2nd generation (2G) ethanol plant built at the Indian Oil Corporation’s Panipat refinery in Haryana.


GS Paper 2 and 3:  Conservation, environmental pollution and degradation ; Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Mains Question

What is the significance of biofuels in India? Examine whether India’s national biofuel policy will help it realise its biofuel potential. (250 words)

Biofuel Facts:

  • Biofuel is a fuel produced in a short period of time from biomass, as opposed to the very slow natural processes involved in the formation of fossil fuels such as oil. The majority of biofuel consumption is in the form of a blend with refined petroleum products like gasoline, diesel fuel, heating oil, and kerosene-type jet fuel. Some biofuels, however, do not need to be blended with their petroleum counterparts and are referred to as drop-in biofuels.
  • Currently, the most common biofuels are:
    • Bioalcohols such as ethanol, propanol, and butanol (a substitute for petrol/gasoline);
    • Biodiesel (a substitute for diesel); and
    • Bio-oils (substitutes for kerosene).

Biofuel Generations:

  • Biofuels are also classified into four categories based on their origin and production technologies.
  • First generation (1G) biofuels are made from consumable food products that contain starch (rice and wheat) and sugar (beets and sugarcane) for bioalcohols, or vegetable oils for biodiesel.
    • However, 1G biofuel yields are low and can have a negative impact on food security.
  • Non-food feedstocks such as forest/industry/agricultural wastes and waste or used vegetable oils are used to produce second generation (2G) biofuels.
  • Third generation (3G) biofuels, also known as ‘algae fuel,’ are made from algae and come in the form of biodiesel and bioalcohols.
    • Although the yield of 3G biofuels is roughly ten times that of 2G biofuels, producing adequate algal biomass and scaling up extraction techniques remain unresolved challenges.
  • Fourth generation (4G) biofuels, like third generation (3G), are produced on non-arable land. However, unlike the third, they do not require biomass destruction.
    • Electro fuels and photo-biological solar fuels are examples of biofuels in this category.

What exactly is ethanol blending?

  • Ethanol is a biofuel that is produced naturally by yeast fermentation of sugars or through petrochemical processes such as ethylene hydration.
  • Ethanol has a high oxygen content, allowing an engine to burn fuel more thoroughly.
  • In ethanol blending, a blended motor fuel containing ethyl alcohol derived from agricultural products is specifically blended with petrol.

India’s ethanol production

  • The Department of Food and Public Distribution in India is the nodal department for the promotion of fuel-grade ethanol-producing distilleries (DFPD).
  • Ethanol is manufactured or obtained from sugarcane-based raw materials such as C & B heavy molasses, sugarcane juice, sugar syrup, surplus rice from Food Corporation of India (FCI), and maize.
    • Molasses passes through three stages: A, B, and C. (in this stage the molasses are most un-crystallised and non-recoverable).
    • Molasses – What remains after the sugar has been crystallised.
    • ‘B’ heavy molasses – Second molasses is formed when A molasses is re-boiled and more sugar crystallises out.
    • ‘C’ molasses accounts for approximately 4.5% of the cane and contains 40% total fermentable sugars (TFS).
  • According to an NITI Aayog paper, over 110 billion litres of ethanol fuel were produced globally in 2019.
    • The United States and Brazil produce 84% of the world’s output, followed by the European Union, China, India, Canada, and Thailand.

What are the advantages of blending ethanol?

  • Currently, India imports more than 85 percent of its oil needs, and ethanol blending could help reduce reliance on petroleum.
  • India’s net petroleum imports in 2020-21 were 185 million tonnes valued at USD 551 billion.
  • Thus, ethanol blending can help the country save billions of dollars and reduce its reliance on imports.
  • Furthermore, ethanol is a less polluting fuel that is equally efficient and less expensive than gasoline.

Biofuel Policy of India

  • In 2021-22, the Central government amended the Biofuel Policy (2018) to set a target of 20% ethanol and 5% biodiesel blending rates nationwide by 2025.
  • According to the NITI Aayog report Roadmap for ethanol blending in India 2020-2025, India’s ethanol production capacity will need to be increased from the expected 3.3 billion litres (in 2020-2021) to at least 10.2 billion litres (5.5 billion litres from sugarcane and 4.7 billion litres from grains) by 2025.
  • The Indian Oil Corporation’s Panipat refinery in Haryana inaugurated a 2nd generation (2G) ethanol plant.
  • It will use approximately 2 lakh tonnes of rice straw (parali) per year to produce approximately 3 crore litres of ethanol.
  • As a result, the plant will provide farmers in Haryana, where rice and wheat are abundant, with a financially rewarding alternative to burning crop residue.
  • The plant places India in the company of the United States and Brazil, the only two countries that have 2G ethanol technology.

The Importance of Ethanol Blending:

  • Blending ethanol into gasoline reduces the amount of imported, expensive, and polluting petroleum needed to run a car. 85% of India’s oil is imported.
  • India imported 185 million tonnes of petroleum in 2020-21, costing $551 billion. Most petroleum products are used in transportation, so E20 can save $4 billion annually.
  • Ethanol is a less polluting fuel that is more efficient and cheaper than gasoline. Large arable land, rising foodgrain and sugarcane production leading to surpluses, availability of technology to produce ethanol from plant-based sources, and the feasibility of making vehicles compliant to EBP are some of the arguments used in the roadmap for E20, which refers to the target as “not only a national imperative, but also an important strategic requirement.”


  • The new ethanol blending target focuses on food-based feedstocks due to grain surpluses and widespread technology. The blueprint departs from the 2018 National Policy on Biofuels, which prioritised grasses, algae, bagasse, farm and forestry residue, and rice, wheat, and corn straw.
  • Food grains meant for the poor are sold to distilleries at lower prices than states pay for public distribution. Distilleries and the public distribution system competing for subsidised food grains could put rural poor at risk of hunger. India ranked 101st on the World Hunger Index 2021.
  • Biofuel production requires land, which affects biofuel and food crop costs.
  • Biofuel crops and fuel production require massive amounts of water, which could strain local and regional water resources.
  • Fossil fuels are more efficient than biofuels. Ethanol produces less energy than gasoline (a fossil fuel).

December 2023