New Delhi, March 24 – The Indian government is planning to reduce the amount of broken rice allocated to the public distribution system (PDS) from 25% to 10%, freeing up approximately 90 lakh tonnes annually for the ethanol sector. Food Secretary Sanjeev Chopra announced this on Tuesday.
Speaking at the All India Distillers' Association (AIDA) conference, Chopra said this proposal aims to provide the ethanol industry with a stable and consistent supply of feedstock, reducing its reliance on whole grain stocks from the Food Corporation of India (FCI).
"Climate change is a reality. We need to ensure a stable supply chain. Providing a consistent supply of broken rice to the ethanol sector will help ensure that," he said.
Currently, the grains distributed under the PDS contain 25% broken rice for the 80 crore beneficiaries. Under the new plan, this will be reduced to 10%.
The surplus broken rice, sourced from the approximately 360-370 lakh tonnes of rice distributed annually, will be sold through auctions to ethanol producers, animal feed manufacturers, and others. A pilot project has already been conducted in five states.
Starting next year, the government will stop supplying whole-grain rice from FCI to distilleries. Broken rice from the revamped food scheme will become the primary grain-based feedstock, Chopra explained.
"Looking further ahead, starting from the next ethanol supply year, whole FCI rice will no longer be available. Instead, we are moving towards supplying broken rice," he said, highlighting the multiple benefits of this change.
This proposal serves multiple interests: it improves the quality of grain received by PDS beneficiaries, eases storage and logistics pressures, and provides the ethanol sector with a more stable and predictable, year-round feedstock.
This announcement comes at a time of rising global crude oil prices. Brent crude, which was trading at around USD 60-70 per barrel three weeks ago, has risen by nearly 40%, putting renewed pressure on India to accelerate its ethanol blending program.
Chopra stated that India's ethanol blending in petrol has already reached 20%, up from just 1.5% in 2013, saving the country over INR 1.63 lakh crore in foreign exchange and cutting crude oil imports by 277 lakh metric tonnes since 2014.
Ethanol production capacity has grown from 420 crore litres in 2013-14 to nearly 2,000 crore litres today, with 650 crore litres added in the past three years.
The government is now shifting its focus from supply to demand, he added, noting that raising the blending limit beyond 20%, mixing ethanol with diesel, and promoting flex-fuel vehicles are all being actively considered.
Chopra cited past supply disruptions as the driving force behind this structural reform. In 2023, a poor sugar harvest and concerns about rice output had forced the government to restrict feedstock supplies to distilleries. The broken rice proposal was designed to prevent a recurrence, he said.
He also urged distilleries to expedite the lifting of the current FCI rice allocation. Of the 52 lakh tonnes set aside for the current supply year, only 21 lakh tonnes have been taken up so far. An additional 20 lakh tonnes remain available, but the discounted rate is only valid until June 30.
Regarding alternative feedstocks, Chopra highlighted that maize is being actively promoted, particularly rain-fed varieties that do not require irrigation, as part of efforts to encourage farmers to diversify away from paddy.
Around 40% of ethanol supply already comes from grain-based sources, primarily maize. The agriculture ministry is also developing high-yield varieties capable of producing five to six tonnes per hectare, he added.
Referring to Brazil's experience after the 1973 oil shock, which led to an ethanol blending rate of around 30%, Chopra said India's current energy crisis presents a similar opportunity to recalibrate its strategy.
"Every challenge carries within it an opportunity. This is an important moment for us to revisit and strengthen our ethanol blending program," he said.
AIDA President Vijendra Singh said the ethanol industry was prepared to go beyond the E20 target already achieved by the country.
The association demanded that the government gradually raise the ethanol blending mandate from 20%, introduce flex-fuel vehicles capable of running on 100% ethanol, promote ethanol-based cook stoves for domestic and commercial use, and explore ethanol blending in diesel.
P S Ravi, Director (Downstream) at the Federation of Indian Petroleum Industry, called on the ethanol industry to support the expansion of India's biofuel program beyond petrol blending.
He outlined three key requests to the AIDA and its members to accelerate further biofuel adoption with respect to biodiesel blending in diesel, ethanol as cooking fuel, and sustainable aviation fuel, along with feedstock development.
Deputy Agriculture Commissioner Mehraj A S, Robert Papa, Agricutlure attache at Embassy of Brazil in New Delhi were among others present at the event.