In 2022 the question was whether India had the feedstock for 20 per cent ethanol blending. The answer arrived in 2025-26: blending is at 20 per cent, and it was not sugarcane that got it there. Grain now supplies 72.5 per cent of allocated ethanol — maize alone 45.7 per cent, up from 6.2 per cent three years earlier — and surplus FCI rice supplies more of India’s fuel than sugarcane juice does.
India Hit E20 on Maize and Rice, Not Sugarcane
The short version.
- Blending is at 20 per cent through ESY 2025-26, held month after month.
- Oil marketing companies allocated about 1,048 crore litres for the year, against 1,776 crore litres offered — a 59 per cent allocation rate.
- Grain supplies 72.5 per cent of that allocation. Cane, in all its forms, supplies 27.5 per cent.
- Maize alone is 45.7 per cent, up from 6.2 per cent in ESY 2022-23 — a sevenfold shift in three years.
- Surplus FCI rice is 22.3 per cent, more than direct sugarcane juice. A fifth of India’s petrol blend comes out of the public foodgrain stock.
The question, and the answer nobody framed
When India committed to 20 per cent ethanol blending, the standard objection was a feedstock objection. The Agricultural Economics Research Review put it as a title: does India have enough feedstock to meet its E20 targets by 2025? Behind the question sat an assumption so widely shared that it was rarely stated — that ethanol meant sugarcane, and that the binding constraint would be cane acreage, water, and the diversion of sugar from food to fuel.
The target has been met. Blending has held at 20 per cent through the current Ethanol Supply Year. And the assumption behind the question turned out to be wrong.
What actually goes into the tank
Here is the feedstock-wise allocation for ESY 2025-26, cycle one.
| Feedstock | Share per cent | Volume crore litres | Family |
|---|---|---|---|
| Maize | 45.68 | 478.9 | Grain |
| Surplus FCI rice | 22.25 | 233.3 | Grain |
| Direct sugarcane juice | 15.82 | 165.9 | Cane |
| B-heavy molasses | 10.54 | 110.5 | Cane |
| Damaged food grains | 4.54 | 47.6 | Grain |
| C-heavy molasses | 1.16 | 12.2 | Cane |
| Grain-based total | 72.47 | 759.8 | Grain |
| Cane-based total | 27.52 | 288.6 | Cane |
| Allocated | 99.99 | 1,048.4 | — |
Oil marketing company allocation for ESY 2025-26 cycle 1, as reported by ChiniMandi. Shares sum to 99.99 and volumes to 1,048.4 crore litres, consistent with the stated ~1,048 crore litre allocation. Family grouping and the two subtotals are computed here.
The speed of the switch
Maize accounted for 6.2 per cent of ethanol in ESY 2022-23. It is 45.68 per cent now. That is a factor of about seven in three supply years, and it happened without a maize-specific programme of comparable prominence to the sugar-sector measures that preceded it.
The mechanism was price and availability rather than proclamation. Sugar diversion runs into an obvious political ceiling — sugar is a consumer price, cane is a farm-gate price with its own statutory floor, and both are watched closely. Grain does not carry the same visibility. When distillery capacity went up and cane availability did not keep pace, the marginal litre came from maize, and then from the FCI’s surplus rice, where the government controls both the stock and the price it releases it at.
An earlier piece on this blog worked out that maize is India’s priciest ethanol feedstock at ₹71.86 a litre. Both things are true at once, and together they are the point: the most expensive feedstock became the largest one. Cost was not the binding constraint. Availability was.
The other number in the tender: 1,776 offered, 1,048 taken
Distillers offered 1,776 crore litres. Oil marketing companies allocated 1,048 crore litres. Fifty-nine per cent of what was offered found a buyer; 728 crore litres of offered capacity did not.
That gap is the clearest single statistic on the state of the sector. India does not have an ethanol supply problem any more. It has an ethanol overcapacity problem, which is the predictable consequence of a decade of policy telling investors that blending would rise and that offtake was assured. Capacity responded, blending hit its ceiling at 20 per cent, and the marginal distillery now competes for an allocation rather than being courted for its output.
This is also why the feedstock question resolved the way it did. In a buyers’ market the oil companies allocate against price and reliability. Grain distilleries can run year-round; cane distilleries are tied to the crushing season. A plant that can supply in July is worth more to a blending programme than one that cannot, whatever the feedstock costs.
What the switch actually moved
Three consequences follow, and they are different in kind from the ones the original feedstock debate anticipated.
The water argument changed address. Much of the case against cane-based ethanol was about irrigation intensity in Maharashtra and Karnataka. Maize is a far less thirsty crop, so on that specific metric the switch is an improvement. But maize acreage expanding to feed distilleries has its own displacement question — what the land was growing before — and that is measured in acreage statistics, not in litres.
Food stock is now an energy input. Surplus FCI rice at 22.25 per cent of allocation means roughly 233 crore litres of India’s fuel comes from the public foodgrain system. That is defensible when stocks are genuinely surplus and deteriorating in storage. It becomes a different conversation in a bad monsoon year, and the mechanism that decides how much rice is released to distilleries versus held for the public distribution system is the thing to watch, not the blending percentage.
The sugar sector lost the argument it thought it was having. Cane interests spent years arguing about diversion economics — B-heavy versus C-heavy molasses, juice diversion, the fair and remunerative price. While that argument ran, cane’s share of the ethanol programme fell to 27.5 per cent. The sector is now a minority supplier to a programme frequently described as a sugar-sector rescue.
What to watch
- The FCI rice release price. It was revised for ESY 2025-26. That single administered number sets how much of the blend comes from the food stock, and it moves without much public debate.
- Maize acreage and imports. If domestic maize cannot keep up with 45.7 per cent of a 1,048 crore litre programme, the shortfall shows up as maize imports — which would convert an import-substitution policy into an import line.
- Whether 20 per cent is a ceiling or a waypoint. Blending has sat exactly at 20 per cent for months. The engine-compatibility constraint for the existing vehicle fleet is real, so E25 or E30 is a fleet question before it is a feedstock question.
- The 728 crore litres that found no buyer. Idle distillery capacity does not stay idle quietly; it becomes a lobbying position for a higher blending mandate.
The honest summary
India answered the feedstock question. It did so by quietly changing what ethanol is made of, and the change was larger and faster than the debate that preceded it. A programme conceived as a use for surplus sugar is now, by volume, a grain programme with a sugar component.
Whether that is a good outcome depends on which objective was the real one. If the goal was reducing petroleum imports, it worked, and the feedstock is a detail. If the goal was supporting cane farmers and clearing sugar surpluses, the programme has drifted a long way from it. Both objectives were used to sell the policy. Only one of them is being met by the current feedstock mix, and it is worth being clear about which.
Sources and caveats
The ESY 2025-26 cycle-1 feedstock allocation — maize 45.68 per cent and about 478.9 crore litres, surplus FCI rice 22.25 per cent and 233.3 crore litres, direct sugarcane juice 15.82 per cent and 165.9 crore litres, B-heavy molasses 10.54 per cent and 110.5 crore litres, damaged food grains 4.54 per cent and 47.6 crore litres, C-heavy molasses 1.16 per cent and 12.2 crore litres, against an allocation of about 1,048 crore litres from 1,776 crore litres offered — is as reported by ChiniMandi. The percentages sum to 99.99 and the volumes to 1,048.4 crore litres, which is the internal consistency check applied here; the grain and cane subtotals, the 59 per cent allocation rate and the 728 crore litre unplaced figure are computed from those numbers. The maize share of 6.2 per cent in ESY 2022-23, and the statement that blending has held at 20 per cent through ESY 2025-26 with monthly supply figures reported through the year, are from ChiniMandi and BioEnergy Times trade reporting. Half-year supply of about 515 crore litres against 1,059 crore litres contracted, with roughly 333 crore litres grain-based, is attributed to All India Distillers’ Association estimates reported via Business Today on 12 May 2026; note that the contracted figure of 1,059 crore litres differs slightly from the 1,048 crore litre cycle-1 allocation, which is why the two are kept separate above rather than combined. The framing question is from the Agricultural Economics Research Review title “Does India have enough feedstock to meet its E20 targets by 2025?”; AERR’s most recent listed issue is Volume 37 Number 1 (2024), so the paper predates the outcome described here and is cited for the question it posed, not for any figure. The ₹71.86 per litre maize cost figure is from this blog’s earlier piece and its own sources, not re-derived here. All feedstock allocation data is oil-marketing-company allocation, not delivered volume; allocation and actual supply diverge, and the half-year supply figures above show that divergence. Nothing in this piece is investment, agricultural or policy advice.
About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.
