India’s ethanol demand could rise to 17.9 billion litres by FY31 under an E25 blending scenario, according to a report by Brickwork Ratings. The estimate would take utilisation of the country’s existing distillation capacity to around 98%.
India currently has 18.25 billion litres of installed distillation capacity. If ethanol blending remains at E20, demand is estimated at 14.3 billion litres by FY31, implying capacity utilisation of around 78%. Under the E25 scenario, demand is projected to rise to 17.9 billion litres.
The bigger capacity requirement could emerge if India moves towards E30 blending. Under this scenario, ethanol demand could reach 21.5 billion litres by FY31, around 18% above the current installed capacity. This could shift the industry from utilising existing assets towards creating fresh distillation capacity.
Brickwork Ratings said the pace of blending-policy progression will be a key factor determining incremental capital expenditure and sector growth. The report also noted that grain-based feedstock is gaining ground, with grain routes accounting for 72% of ESY26 Cycle 1 allocations.
The sector’s focus is expected to remain on higher capacity utilisation, feedstock optimisation and better monetisation of existing assets, while an E30 trajectory could bring new investments into ethanol production.
