← External Forces: Climate & Resource (all topics)
Ethanol blending (E20) - starch & maize impact
What it is
The Ethanol Blended Petrol programme, which mixes ethanol into petrol to cut crude imports. India hit 20% blending in 2025, five years ahead of target, on installed capacity near 2,000 crore litres across 380+ distilleries
Feedstock has shifted decisively: maize became the single largest source at nearly 50% of supply in ESY 2024-25, displacing sugarcane. E27 and E30 are under consideration for 2028-30
Impact on industries
- For starch makers this is a cost shock, not an opportunity - ethanol diversion raised maize costs by around 20% and turned a surplus crop into a contested one
- Administered ethanol pricing sets an effective floor under maize procurement, so a food-processing buyer now competes against a policy-supported bidder rather than a market one
- Export availability collapsed as diversion took hold, with maize exports falling from ~4 MMT in 2023 to ~450,000 tonnes in 2024
- Maize acreage is responding - up ~9 lakh hectares in kharif 2025-26 - which should ease the squeeze over time, though it comes at the expense of pulses and oilseed area