India’s drive to blend more ethanol into petrol and shield itself from global energy price shocks has increased the amount of farmland tied to fuel production more than eight-fold in four years, according to new research.
India depends on imports for some 85% of its oil, so using more ethanol, made from crops such as sugarcane, rice and maize, is central to its plans to boost its energy security and reduce planet-heating emissions. State-run oil companies currently mix 20% ethanol in each litre of petrol before it reaches the pumps. The area of land linked to ethanol feedstocks, especially maize and rice, has risen from 0.7mn hectares in 2020-21, to 5.7mn hectares in 2024-25, reflecting a rapid expansion in grain-based ethanol production, data presented by Delhi-based research organisation Arcus Policy Research this month showed. While India’s ethanol programme was initially driven by surplus sugar supplies, by 2024-25 only 32% of ethanol supplied to public fuel retailers came from sugarcane, while grain-based ethanol accounted for 68%, according to Arcus Policy Research.
The shift is reshaping crop choices, increasing maize use for fuel and relying heavily on government rice stocks to meet blending targets, said researchers and industry executives at a policy discussion this month where the data was presented.
In just over a decade, India increased the amount of ethanol blended into petrol more than 13-fold, from 1.5% in 2014 to 20% in 2025, reaching its E20 target five years ahead of schedule despite a backlash from some drivers over reduced fuel efficiency and concerns about engine wear.
The government says the shift to biofuel saved Rs1.06tn ($12bn) in crude oil imports and avoided 54.4mn tonnes of carbon emissions in a decade, equivalent to emissions from 12mn petrol cars a year. It also describes the reduction in fuel efficiency as marginal. The gains, however, come with trade-offs. The diversion of food crops toward fuel has raised concerns over grain availability, as well as land and water use. Scientists continue to debate whether crop-based ethanol significantly lowers emissions once the land and water needed to grow the crops are factored into the equation. “The rapid expansion reflects a major shift in India’s ethanol programme away from sugarcane and toward grains such as maize and rice,” said Shweta Saini, CEO of Arcus Policy Research.
Nearly 29% of India’s maize production was diverted toward ethanol in 2024-25, while maize cultivation expanded from 9.9mn hectares in 2020-21, to 13.7mn hectares, the data showed. Researchers said the shift was beginning to ripple through agricultural supply chains, affecting feed markets, crop choices and land use patterns.
Saini said the market for soybeans, a major ingredient of animal feed in India, had already been hit by farmers growing maize for ethanol production, which generates a byproduct that is also used to feed livestock.Researchers and former policymakers also raised concerns over the growing diversion of government rice stocks toward ethanol production. Former agriculture secretary Siraj Hussain said much of the broken rice being supplied for ethanol was still suitable for human consumption and would previously have entered India’s subsidised public food distribution system. India allocated a record 5.2mn metric tonnes of rice from state stockpiles for ethanol production in 2024-25, according to Reuters. Saini said the issue reflected wider contradictions in Indian agriculture policy, where governments continue incentivising paddy cultivation despite repeated calls to diversify toward pulses and less water-intensive crops.
She warned that while food grain supplies may remain stable, shifting more land and incentives toward fuel-linked crops could increasingly affect India’s “nutrition security”, especially as the country remains heavily dependent on imports of edible oils and pulses. The concerns come as PM Narendra Modi has urged citizens to reduce edible oil consumption as part of austerity measures announced after rising energy prices linked to the ME conflict increased pressure on India’s foreign exchange reserves.