IS IT APPROPRIATE TO USE RICE AS FEEDSTOCK FOR ETHANOL PRODUCTION IN INDIA – By N.S.Venkataraman
With the object of reducing import dependence on crude oil and as an eco friendly strategy, Government of India is implementing plans to blend ethanol with petrol. This is an appropriate strategy. As of February, 28, 2025, India has achieved 17.98 % ethanol blending rate under the ongoing ethanol supply year ( 2024-25 ). The country is now moving towards achieving 20% blending target milestone. This is a remarkable achievement .
To achieve the target of 25% ethanol blending , it is necessary to increase the production of ethanol in the country substantially.
Feedstock for ethanol production :
In order to make ethanol available in adequate quantity, Government of India has initiated several proactive policies and has introduced incentive schemes. Number of new projects for production of ethanol are under implementation.
The sugar industry continues to be the backbone of the ethanol economy, as sugarcane molasses is the primary feedstock for the production of ethanol.
To facilitate the production of ethanol in large quantity to meet the requirement of ethanol blending target and after producing almost the maximum quantity of ethanol that can be produced from sugarcane molasses available , Government of India has permitted sugarcane juice, maize, biomass , grain, rice and others to be used as feedstock for ethanol production.
Cost benefit scenario:
When food crop like maize is allowed to be used for production of ethanol, the question arises as to whether ethanol making is the most profitable and beneficial way of utilising maize over other potential applications. Such decision has to be based on cost benefit analysis.
Government of India should not be carried away by the sole objective of ensuring ethanol availability for blending with petrol, without carefully examining the alternate applications of maize and the benefits . It appears that the government has not paid adequate attention to the other options for utilising maize profitably and in tune with the country’s needs , due to its tunnel vision for finding feedstock for ethanol production.
The critics may be justified in concluding that approach of government to encourage use of maize as feedstock for production of ethanol is similar to “biting the nose to spite the face”
Application potential of maize :
Maize is a significant food crop in India, ranking as the third most important cereal after rice and wheat. It is used as both food and fodder crop. Maize also serves as raw material for various industrial and derivative products .
There are several derivative products that can be produced from maize , that are not presently produced in India and largely or entirely imported. For example, citric acid and L-Lysine can be produced using maize as feedstock. Both these products are not presently produced in India and Indian requirement is entirely met by import. The present import of citric acid exceeds one lakh tonne per annum and import of L-Lysine exceeds 85,000 tonne per annum. The domestic demand for both these products are increasing at 6 to 7% per annum. There are so many other maize based derivative products that are presently not produced in India and imported such as mannitol.
Present production of maize in India is 42 million tonne per annum and Government of India is targeting to increase the domestic production to 50 million tonne by the year 2030.
Conversion of maize into value added products such as citric acid , L-Lysine would be far more remunerative than conversion of maize into ethanol . There is huge outflow of foreign exchange due to import of these products, as they are not produced in India and the global price is also frequently fluctuating.
In order to boost the production of ethanol from maize , Government of India is providing incentive to fix attractive price for ethanol production by distilleries. Government of India is spending substantial amount to provide this incentive.
In January 2024, Oil Marketing Companies (OMCs) in India increased the procurement price of maize-based ethanol to Rs 71.86 per liter, including a Rs 5.79 per liter incentive. This move was a part of efforts to boost ethanol production from maize and meet the target of 20% ethanol blending in petrol by 2025.
Rice as feedstock for production of ethanol –Unacceptable in letter and spirit
Rice is an essential food grain needed to prevent hunger and to meet basic nutritional needs of people. Historically and traditionally, people have emotional affinity to rice not only in India but in several other countries such as Japan, China, Thailand , Vietnam , Sri Lanka and others. Any shortage scenario for rice is bound to lead to social unrest .
Recently, Japanese government has been forced to release three lakh tonne of rice from its emergency reserves due to shortage of rice in the market , in a bid to calm down growing public frustration about the scarcity in the availability of rice. Public anger has intensified in recent weeks in Japan due to non availability of rice in adequate quantity for all sections of people, with social media ,documenting incidents of rice theft from super markets and storage facilities. It is reported that the concerned minister in Japanese government has tendered his resignation due to the rice scarcity scenario in the country.
As rice is an essential food crop much needed by the people, the legitimate question arises as to whether it is appropriate to use rice as feedstock for the production of ethanol. Many people seem to be of the view that such a decision amount to misuse of rice and is wrong in letter and spirit. . This is a calculated risk on social front and certainly not in tune with people’s view on the importance of rice for human welfare.
It is absolutely essential that rice should be optimally used for human consumption and diverting rice for other use is unwise and amount to lack of understanding of the ground realities.
Unmindful about the questions raised on the appropriateness of using rice , which is a food crop, as feedstock for the production of ethanol, , Government of India has now hiked the rice allocation for ethanol to 52 lakh tonne for 2024-25 ethanol supply year, which began in November, 2024.
Assuming a conversion rate of 470 litres of ethanol produced per tonne of rice used as feedstock, alcohol distilleries can produce nearly 245 crore litre of ethanol from the 52 lakh tonne rice quota allotted to distilleries for ethanol production.
What justification ?
Government has not given any acceptable justification so far for using rice for production of ethanol ,except stating that allotment of rice for ethanol production is needed to increase the production of ethanol.
Perhaps, Government of India thinks that it has comfortable stock of rice in the Food Corporation of India (FC I) godown and can afford to use rice for any purpose other than for human consumption. As of May,15, 2025 , India is reported to have 38.19 million tonne of rice in storage, which is higher than the mandatory buffer norm of 13.54 million tonne. India has also unmilled paddy , which can yield 21.36 million tonne of rice.
It is often reported that Food Corporation of India find it difficult to stock all the quantity of rice received by it due to inadequate storage capacity . Media reports also often appear about rice being stored in open areas exposed to rain and sun and damaging it.
Is government of India planning to use damaged rice in FCI godown for production of ethanol ? There is no such statements from government of India so far.
In any case, if India has more rice production than what is needed by the country, then the right strategy would be to export rice to other countries ,that would strengthen the agricultural sector in India and improve the farmers’ income.
When foreign exchange outflow due to import of crude oil is a matter of concern, then the solution is to improve the export earning in whatever way possible for the country. Export of rice is one way.
Government of India does not seem to have firm and consistent export policy for rice. In 2023-24, Government of India imposed curbs on shipments of rice to other countries . However, India has lifted all curbs on rice exports in October,2024, after its graneries were filled with rice. The only curb that remained was a ban on 100% broken rice , which was also lifted on March,7 this year.
Other options
There are other options for reducing the import of crude oil in addition to ethanol blending. While steps have been taken by government of India to boost the production of renewable energy, boost the production of electric vehicles and so on, the feasibility of increasing the production of ethanol by using alternate non food crop feedstock has to be given enough focus.
Obviously, alternate feedstock for ethanol production is the algae crop, which can be grown in coastal areas and waste lands , does not need clean water and need only sun shine and carbon dioxide. From algae crop, biofuel can be produced , as algae crop species contain around 20% oil. From algae crop biomass , ethanol can be produced by fermentation.
As algae crop does not come in conflict with the food crop, massive cultivation of algae all over India and use of algae biomass for production of ethanol is the most attractive opportunity for India.
It is strange and surprising that such obvious advantage has not been considered by government of India with the seriousness that it deserves.
Is it short term planning ? :
India’s population is now 140 crore and is still increasing. India has emerged as the most populated country the world with highest population density. As the present rate of population growth, it is estimated that India’s population would increase to 190 crore in the next few decades.
While India is registering steady economic and industrial growth , particularly in the last ten years, still substantial percentage of population live below poverty line and government of India is distributing rice free to lower income group in the country to sustain them.
In such circumstances, allotting rice for the production of ethanol can be reasonably criticised as a counter productive and short term plan . In the unfortunate event of rice production falling due to any seasonal or other factors, government cannot afford to allot rice for ethanol production.
Government of India should derive the right lessons from the present ongoing rice crisis in Japan and social unrest that it has caused.
Right course for Government of India is to export the surplus rice. It is a fact that price of rice in the global market often fluctuates based on supply scenario. Agencies such as Food and Agricultural Organisation and the US department of Agriculture and the International Grains Council are estimating that global production of rice in 2024-25 season can be above 535 million tonne , which would be 10 million tonne higher than 2023-24 season. It could result in carry over stocks to the 25-26 season.
Nevertheless, international trade of rice is vibrant and India should carve out a firm place for itself in the global rice export market , instead of changing its export policy frequently.
Diverting surplus rice for other purpose such as feedstock for ethanol production simply because India has surplus rice stock at present , amount to short term policy and knee jerk reaction.
