Ethanol may soon become a household cooking fuel in India as the Ministry of Petroleum and Natural Gas prepares a policy framework to mainstream it alongside LPG, according to Business Today.
Policy Framework and Subsidies
The government is expected to examine subsidy mechanisms and measures to develop the necessary supply chain for wider adoption of ethanol, the source reported. Industry associations representing fuel suppliers are holding parallel discussions with the government on the proposed policy. "An alternative clean cooking policy is in the works that would help ethanol to be adopted alongside LPG as a household cooking fuel," an executive told a financial daily, adding that the policy could be ready by September. A second industry executive said the government may roll out a subsidy scheme that could be capital-driven (a one-time investment support) or an ongoing fiscal commitment.
Ethanol Production Capacity and Surplus
India's move to promote ethanol as a household cooking fuel comes at a time when domestic ethanol availability has risen sharply. According to a CareEdge Ratings report released in May, the country's annual ethanol production capacity has already exceeded 20 billion litres, with an additional 4 billion litres expected to be added during the current financial year. The table below summarizes the capacity and consumption breakdown:
| Category | Volume (billion litres) |
|---|---|
| Annual production capacity | >20 |
| Additional capacity expected (current FY) | 4 |
| Annual consumption under E20 blending programme | ~11 |
| Consumption by liquor, pharma, and chemical industries | 3–3.5 |
| Unutilised production capacity | ~7 |
An alternative clean cooking policy is in the works that would help ethanol to be adopted alongside LPG as a household cooking fuel.
With this surplus, India could also explore ethanol exports to neighbouring markets such as Nepal, Bangladesh and Indonesia, where ethanol blending targets stand at 10% but domestic feedstock availability and distillation capacity remain inadequate, according to the Business Today report.
Industry Involvement and Trials
Oil marketing companies (OMCs) are actively involved in discussions on the initiative, according to the source. They have undertaken research and development related to ethanol-powered cooking stoves and are exploring potential acquisitions or partnerships involving existing ethanol cooking technologies. Industry executives said that, as part of the rollout, state-run OMCs may be asked to install ethanol automated teller machines (ATMs), allowing consumers to purchase ethanol in canisters for use in these stoves. These dispensing units could be set up at the retail fuel outlets operated by oil companies. In April, a report suggested that, following the government's direction, ethanol-powered cooking stoves were undergoing trials as a cleaner alternative for household cooking.
Strategic Energy Security
"We all saw how the West Asia war impacted India's LPG supply. It is a good option to use excess ethanol capacity as an alternative fuel to LPG and reduce imports of the fuel," said another industry executive, as reported by Business Today. Although India has diversified its LPG procurement since the outbreak of the West Asia conflict on February 28, it continues to rely heavily on Gulf countries for LPG imports, with a substantial share of those supplies passing through the Strait of Hormuz. The source also noted that, following the supply disruptions exposed by the Iran war, state-owned OMCs are preparing a strategic LPG storage plan capable of covering nearly 30 days of demand to strengthen the country's energy security. Additionally, a report titled India's Clean Cooking Shift: Scaling non-fossil fuel solutions, released by the International Institute for Sustainable Development in February, stated that shifting towards electric cooking and biogas could help India save more than Rs ...
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