[Answered] Why has India’s ethanol blending programme shifted toward grain feedstocks, and how does this reliance compromise food security and agricultural sustainability? Examine.

Introduction

India’s EBP Programme achieved its 20% target (E20). However, as highlighted in NITI Aayog’s Biofuel Roadmap and the Economic Survey 2025–26, restricting sugarcane juice diversion due to climatic shocks has caused a policy pivot toward grain-based feedstocks, risking a “food-versus-fuel” distortion.

Why has the Feedstock Mix Shifted?

1. Sugar Output Volatility and Climate Shocks: Droughts in major cane belts forced restrictions on B-heavy molasses, compelling distilleries to alter feedstock inputs. Example: Cane Juice Bans.
2. Meeting Blending Mandates Year-Round: Achieving uniform E20 blending across non-sugar-producing states necessitated decentralized, grain-based distillery infrastructure. Example: Regional Grain Distilleries.
3. Subsidized Off-Take of Surplus Buffer Stocks: Liquidating excess Food Corporation of India (FCI) rice stocks provided distilleries with cheap, guaranteed feedstock. Example: Subsidized FCI Off-Take.
4. Stronger Price Incentives: The Economic Survey 2025-26 notes that administered maize-ethanol prices increased at a 11.7% CAGR during FY22-FY25, faster than rice- or molasses-based ethanol, strengthening incentives for farmers and distillers to shift towards maize. Example: Market-led substitution.

Sugarcane-Based vs. Grain-Based Ethanol Routes

Food Security & Ecological Trade-Offs of Grain Reliance

1. Threats to Food Security & Public Distribution: Diverting millions of tonnes of rice and maize to ethanol risks inflating domestic cereal prices during adverse monsoon years. Example: Food-Vs-Fuel Paradox.
2. Depletion of Groundwater and Aquifers: Paddy cultivation relies heavily on groundwater; converting rice into fuel exacerbates water stress in grain-producing regions. Example: Punjab Groundwater Depletion.
3. Inflationary Pressures in Animal Feed Sector: Diverting maize and broken rice to ethanol raises input costs for dairy and poultry industries. Example: Poultry Feed Spikes.

Why should India still pursue ethanol?

1. The programme has generated significant energy-security gains. By August 2025, ethanol blending had reportedly saved over ₹1.44 lakh crore in foreign exchange and substituted about 245 lakh metric tonnes of crude oil.
2. It also creates markets for farmers, reduces petroleum-import vulnerability and supports cleaner transport.
3. Thus, the problem is not ethanol itself, but an increasingly grain-dependent pathway.

Way Forward

1. Promote Non-Food 2G Ethanol Technologies: Accelerate commercial production of Second-Generation (2G) ethanol using crop residue to eliminate food security risks. Example: Paddy Straw Plants.
2. Shift Grain Sourcing to Climate-Resilient Crops: Transition feedstock reliance from rice to rainfed maize and sweet sorghum through targeted MSP incentives. Example: Maize-Based Distilleries.
3. Implement Dynamic Feedstock Allocation Systems: Establish automated tracking to restrict food grain diversion whenever buffer stocks fall below threshold limits. Example: Real-Time Stock Audits.
4. Adopt a feedstock hierarchy: prioritise agricultural waste, 2G biomass and non-food feedstocks before edible grains. Example: Food-first principle.
5. Reorient incentives: reward ethanol according to lifecycle emissions, water intensity and food-security impact rather than merely volume. Example: Outcome-based subsidies.
6. Scale 2G technology: strengthen PM JI-VAN, biomass aggregation, enzyme technology and decentralised biorefineries. Example: Circular bioeconomy.

1. Create an Energy–Food–Water dashboard: integrate MoPNG, Agriculture, DFPD and NITI Aayog data for real-time feedstock governance. Example: Convergent policymaking.

Conclusion

As emphasized in NITI Aayog’s Task Force Report on Biofuels, India’s energy transition must maintain ecological balance, ensuring biofuel policies protect national food security while driving Viksit Bharat@2047.