GST on ethanol for EBP programme reduces to 5 percent

Under Ethanol Blended Petrol (EBP) Programme the Ethanol-blended petrol supplied to public sector OMCs has increased from 2506 crore litres in 2013-14 to an estimated 4828 crore litres in 2023-24, with the increase in blending percentage rising from 1.53 percent to 14.60 percent

Government has implemented several strategic measures to achieve ethanol blending targets under the Ethanol Blended Petrol (EBP) Programme. These initiatives include expanding the range of feedstocks for ethanol production and establishing an administered price mechanism for the procurement of cane-based ethanol. Additionally, the Goods and Services Tax (GST) on ethanol for the EBP Programme was reduced to 5 percent, fostering a more favourable economic environment for ethanol producers. Minister of state in the ministry of petroleum and natural gas Suresh Gopi informed the Lok Sabha in a written reply. 

He mentioned that various Ethanol Interest Subvention Schemes (EISS) were introduced between 2018 and 2022 to encourage ethanol production from both molasses and grain-based sources. Moreover, Oil Marketing Companies (OMCs) have entered into Long-Term Offtake Agreements (LTOAs) with Dedicated Ethanol Plants (DEPs) to ensure consistent supply. These concerted efforts have significantly boosted ethanol supply. Ethanol procurement by public sector OMCs increased from 250.6 crore liters in the 2013-14 ethanol supply year to an estimated 482.8 crore liters in 2023-24. Consequently, the ethanol blending percentage has surged from a modest 1.53 percent to an impressive 14.60 percent over the decade. Ethanol blending has yielded substantial environmental and economic benefits. Over the last ten years, it has facilitated the substitution of approximately 185 lakh metric tonnes (LMT) of crude oil, resulting in a net reduction of around 557 lakh metric tonnes of CO₂ emissions. These achievements highlight India’s proactive approach toward sustainable energy transition and reaffirm its dedication to achieving self-reliance in the energy sector while contributing to global climate action.