India’s ethanol production capacity has doubled, paving the way for potential diesel blending after successful petrol blending, says All India Distillers’ Association (AIDA)
India has achieved a major milestone in its biofuel journey, with ethanol blending in petrol reaching 20% (E20) and the country’s ethanol production capacity now doubled to around 2,000 crore litres (20 billion litres) annually. Building on this success, the All India Distillers’ Association (AIDA) has announced readiness to double ethanol output and explore blending opportunities in diesel using isobutanol (a derivative suitable for diesel engines), which could benefit farmers and strengthen rural economies.
AIDA President Vijendra Singh stated that the industry has scaled up machinery and raw material availability—from grains like maize, rice, and sugarcane—to support production of up to 2,000 crore litres of ethanol. Previously focused on supplying around 1,000 crore litres for petrol blending, the sector now faces surplus capacity. This excess can be redirected to produce isobutanol for diesel blending without any issues, as all necessary resources are in place.
While petrol currently uses 20% ethanol blending under the E20 program, AIDA proposes utilizing surplus production for diesel. Direct ethanol-diesel blending has faced technical challenges globally and in India, but isobutanol (derived from ethanol) offers a promising alternative due to its better compatibility, higher energy content, and lower water absorption.
Singh emphasized that diesel-ethanol blending is already being tested successfully. For instance, Karnataka State Road Transport Corporation is operating 100 buses on diesel blended with ethanol. He noted that such initiatives have been implemented in other countries for years without harming vehicles (especially non-very old ones).
Key benefits highlighted by AIDA:
- Farmers gain significantly, as producing 1,000 crore litres of ethanol brings them approximately ₹72,000 crore.
- Doubling production to 2,000 crore litres could further boost rural income and village economies.
- It supports India’s goals of reducing fuel imports, cutting emissions, and promoting renewable energy.
However, AIDA clarified that no formal discussions have yet taken place with the government or the Petroleum Ministry. The association plans to soon present its proposal to relevant officials. A major announcement on this could come during AIDA’s conclave in Delhi on March 24, 2026.
This push follows government efforts, including trials by the Automotive Research Association of India (ARAI) for up to 10% isobutanol in diesel, as announced by Union Minister Nitin Gadkari in 2025. With E20 now stabilized ahead of schedule, the focus shifts to managing surplus ethanol and expanding biofuels into diesel and other sectors like sustainable aviation fuel.
The initiative aligns with global biofuel trends and could mark the next big step in India’s energy transition, provided government approvals are secured.
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