Context:

• In May 2025, the Government of India approved the allocation of an additional 2.8 million tonnes (28 lakh tonnes) of rice from the Food Corporation of India (FCI) stocks at a subsidized rate for ethanol production.
• The objective of this decision is to strengthen India’s energy security goals, ensure effective utilization of surplus foodgrains, and promote environmental sustainability.

Total Allocation and Production Capacity:

• This move pertains to the Ethanol Supply Year (ESY) 2024-25 (from 1 November 2024 to 31 October 2025).
• With this approval, the total allocation of FCI rice for ethanol has increased to 5.2 million tonnes (52 lakh tonnes).
• Each tonne of rice can yield approximately 470 litres of ethanol, leading to a total potential output of 2.45 billion litres of ethanol.

Economic Aspects:

• The rice will be provided to distilleries at a subsidized rate of ₹22.50 per kg, whereas the economic cost of rice as per FCI is ₹41.73 per kg.
• The estimated subsidy burden on the government under this scheme is around ₹10,000 crore.

Energy Security and Environmental Benefits:

• This decision is a significant step toward achieving the target of 20% ethanol blending in petrol by 2025-26 under the Ethanol Blended Petrol (EBP) Programme.
• Ethanol blending will help in:

• • Reducing dependence on fossil fuels
  • Saving foreign exchange
  • Lowering carbon emissions

Storage and Surplus Management:

• Currently, FCI holds about 61 million tonnes of rice, which is much higher than the required buffer stock of 13.58 million tonnes.
• Utilizing this surplus rice for ethanol production will help reduce storage costs and prevent wastage of grains.

About Ethanol:

Definition:

• Ethanol, also known as ethyl alcohol (C₂H₅OH), is a colorless, flammable liquid with a mild odor.
• It is widely used as a biofuel and in several industrial applications.

Main Sources:

1st Generation (1G) Sources – Food Crops:

• Sugarcane
• Maize (corn)
• Rice
• Wheat

2nd Generation (2G) Sources – Non-Food Biomass:

• Agricultural waste (e.g., parali, bagasse)
• Industrial waste
• Lignocellulosic biomass
• Considered more sustainable and eco-friendly than 1G sources.

Uses of Ethanol:

1. Fuel:

• Used as a blending agent with gasoline to create a cleaner fuel alternative.

2. Solvent:

• Used in pharmaceuticals, perfumes, and chemical production.

3. Medical & Laboratory Applications:

• Functions as an antiseptic, disinfectant, and preservative.

4. Chemical Feedstock:

• Acts as a raw material in the production of various chemicals.

Ethanol Programme in India:

• EBP Programme (Ethanol Blended Petrol):
• Promotes blending ethanol with petrol for use in vehicles.
• Government Target : Achieve 20% ethanol blending in petrol by 2025-26.