State-owned Hindustan Petroleum Corp Ltd (HPCL) and Gas Authority of India Ltd (GAIL) are planning to build second generation (2G) grain-based refineries, to help boost India’s ethanol output by 2025.

HPCL will invest Indian rupee (Rs) 4bn ($54m) on a 125,000 litre/day grain-based ethanol plant at Una in the Himachal Pradesh state in northern India, with plant site of 70 acres to be provided by the state government.

Feedstock grains such as rice and maize for the plant would be sourced from four districts in Himachal  Pradesh and two districts in neighbouring Punjab state, the company said. GAIL is planning a bigger grain-based ethanol plant with a 500,000 litres/day capacity, in joint venture with private partners.

“We are seeking partners for an ethanol refinery, so that we can also be part of ethanol blending programme of the Government of India, which is now a new lucrative area, which has been opened by the government,” a senior company official said.

Ethanol produced at the proposed plant would be sold to oil marketing companies for blending with petrol, he added.

While the company is yet to finalise investment details and plant location, GAIL intends to build the refinery in an ethanol-deficient state, the company source said.

India will need to produce more than 12bn litres (4.2bn tonnes) of ethanol to achieve its target of blending 20% ethanol in fuel by 2025, and to meet the requirements of the chemical and other sectors, as per GAIL’s assessment. Ethanol used for blending in fuel in the country is traditionally produced using sugarcane molasses and juice.


By 2025, the government expects the sugar industry to produce 7bn litres of ethanol or 58% of the total output required, with grain-based and other 2G ethanol plants expected to produce the remaining 5bn litres.

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The government expects to achieve nearly an 8.5% ethanol blending rate for fuel from December 2020 to November 2021.

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