By channeling surplus broken rice into biofuel, the government strengthens supply chains, curbs import dependence, and advances a new era of sustainable energy

In a sweeping policy shift, the Government of India is preparing to channel nearly 90 lakh tonnes of broken rice annually from the Food Corporation of India (FCI) into the ethanol industry. This redirection, achieved by reducing the share of broken rice distributed under the public food system from 25 percent to 10 percent, is designed to secure a steady feedstock supply for distilleries while reinforcing India’s energy independence.

Ethanol as a Strategic Shield

India’s ethanol blending in petrol has already surged to 20 percent, a remarkable leap from barely 1.5 percent a decade ago. This transformation has saved the nation over Rs 1.63 lakh crore in foreign exchange and reduced crude imports by 277 lakh metric tonnes since 2014. With global oil prices climbing sharply in recent weeks, the government is intensifying its focus on ethanol as a strategic buffer against external shocks.

A Reliable Feedstock Pipeline

The new plan will end the practice of supplying whole‑grain rice from FCI stocks to distilleries. Instead, broken rice — freed from the restructured food distribution scheme — will serve as a year‑round, dependable feedstock. A pilot program has already been tested across five states, proving the viability of this approach. The government intends to auction surplus broken rice to ethanol producers, animal feed manufacturers, and other industries, ensuring efficient utilization of resources.

Addressing Industry Challenges

The ethanol sector has long grappled with supply disruptions, particularly during years of poor sugar harvests or concerns over rice production. By guaranteeing a consistent stream of broken rice, the government aims to stabilize the industry and insulate it from climate‑related uncertainties. Distilleries are being urged to accelerate the lifting of current allocations, as significant volumes remain untapped despite discounted pricing.

Expanding the Ethanol Horizon

Beyond securing feedstock, India is actively considering raising the blending limit above 20 percent, extending ethanol use to diesel, and promoting flex‑fuel vehicles. These measures, once implemented, will deepen the role of ethanol in India’s energy mix and further reduce reliance on imported crude.

Maize as a Parallel Pathway

Maize is being advanced as a second alternative feedstock, particularly varieties suited to rain‑fed cultivation. High‑yield strains under development promise five to six tonnes per hectare, offering farmers new opportunities while diversifying the ethanol supply chain. Already, 40 percent of India’s ethanol output originates from grain‑based sources, with maize playing a central role.

Scaling Capacity for a New Energy Era

India’s ethanol production capacity has expanded dramatically, rising from 420 crore litres in 2013‑14 to nearly 2,000 crore litres today, with 650 crore litres added in just the past three years. This rapid growth underscores the nation’s commitment to building a resilient, sustainable energy ecosystem.