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Ethanol producers face overcapacity as blending program hits roadblock

For ethanol supply year (ESY) 2025-26, several ethanol producers have procurement orders below capacity, forcing some to pause expansion plans as policy uncertainty grows around the blending roadmap

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Grain Ethanol Manufacturers Association (GEMA) said the current situation of oversupply was not the result of speculative investment by producers, but a direct outcome of strong policy signals and a future-oriented programme led by the government. (Representational Image)

Shubhangi Mathur New Delhi

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The government is reassessing its ethanol blending programme after reports claimed that a vehicle’s efficiency and mileage is affected due to the presence of ethanol, an agricultural by-product obtained from the processing of sugar and other sources like rice or maize, in fuel. Ironically, besides vehicle owners, ethanol producers are now feeling the pain from the blending controversy.
 
For ethanol supply year (ESY) 2025-26, several ethanol producers have procurement orders less than their capacities. Meanwhile, some producers have dropped plans of increasing production capacity due to policy uncertainty. The Ethanol Supply Year (ESY) in India runs from November 1 to