India's Ethanol Blend Expected Below 20% Target

India’s ethanol-blending drive faces a likely setback as drought-hit harvests and rising food prices push the government to prioritize food security over fuel. With monsoon rainfall about 13% below normal and maize and sugar prices sharply higher, industry estimates suggest blending could fall from the 20% target to roughly 15%–17% in the 2026–27 supply year. The government has also barred procurement of ethanol made from sugarcane juice, sugar syrup and B-heavy molasses for that year, while allowing feedstocks such as maize, surplus rice and C-heavy molasses; using rice could be costly. The move contrasts with new rules permitting vehicles to use fuels containing up to 100% ethanol, even as restricted supplies could reduce savings from lower oil imports and strain producers that expanded capacity. The 20% blending program has been credited with nearly ₹2 trillion in oil-import savings since 2014, but sources say food availability must take precedence during a drought.