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India has revised its export regulations to permit the export of Second Generation (2G) ethanol, requiring companies to obtain export licenses and feedstock certifications.
This move supports sustainable fuel production by utilising waste materials, reducing food competition, and addressing environmental concerns.
The initiative aligns with India's ethanol blending goals and global biofuel trends.
India updated its export rules on September 24, 2025 to allow Second Generation (2G) ethanol to be exported. Companies making 2G ethanol from cellulosic material for fuel and non-fuel purposes will need a valid export authorisation and feedstock certification.
Raw materials for 2G ethanol includes materials such as wood waste, industrial wastage, agricultural and forestry residues such as rice and wheat straw, corn and stover, sugar cane residue, woody biomass as well as non-food crops such as grasses and algae, and residue streams, among other things, according to the Directorate General of Foreign Trade under the Union Ministry of Commerce and Industry.
Unlike 1st generation ethanol, which uses edible crops like corn or sugarcane, 2G ethanol production utilises waste materials. This reduces competition with food sources, minimises food waste and addresses environmental issues like stubble burning that contributes to CO2 emissions.
“Additional policy conditions for export of 2G ethanol are notified with immediate effect,” DGFT said in a notification.
India aimed for 20 per cent ethanol blending in petrol (E20) by 2030 (which has been achieved five years ahead of the original deadline), with 2G playing a key role to meet demand sustainably. Globally, it’s seen as a bridge to advanced biofuels, with growing adoption in regions like South America and Asia.
On September 23, Oil Marketing Companies (OMC) invited bids for the supply of around 10.5 billion litres of Denatured Anhydrous Ethanol for cycle 1 of ethanol supply year (ESY) 2025-26.
Till August in the 2024-25 ESY, the total contracted ethanol quantity was 11.59 billion litres and total receipt quantity was around 8.2 billion litres.
Indian Oil Corporation Ltd produced India’s first commercial-scale 2G ethanol at its bio-refinery in Panipat, Haryana, which was inaugurated in August 2022 and began full production shortly after. The plant processes 200,000 tonnes of rice straw annually to yield about 30 million litres of ethanol, using Praj Industries’ proprietary "enfinity" technology. It operated at around 30 per cent capacity as of mid-2024 but addresses stubble burning issues in northern India.
Other key producers include Hindustan Petroleum Corporation Ltd, with a 100 KLPD 2G plant under construction in Bathinda, Punjab. It is using surplus grains like maize and rice. There is also the Numaligarh Refinery Ltd, set to commission India’s first bamboo-based 2G bio-refinery in Assam by late 2025, producing 50,000 tonnes annually. DBT-ICT Centre for Energy Biosciences (Institute of Chemical Technology, Mumbai) is also in the list. It demonstrated India’s first 2G ethanol pilot plant (10 tonnes / day) at India Glycols Ltd, Kashipur, in 2015, using lignocellulosic biomass.