In a historic step for its biofuel industry, India revised its export regulations to permit the export of Second Generation (2G) ethanol as of September 24, 2025. The Union Ministry of Commerce and Industry’s Directorate General of Foreign Trade (DGFT) stated that businesses producing 2G ethanol from cellulosic material can now export it for both fuel and non-fuel uses, provided they hold a valid export authorization and have obtained feedstock certification. India allows 2G ethanol exports, which demonstrates the country’s intention to support the objectives of the global energy transition while enhancing its reputation for renewable energy.

Since 2G ethanol is made from agricultural residues, woody biomass, algae, and other non-food materials rather than First Generation (1G) ethanol, which depends on food crops like maize or sugarcane, it is a more resource-efficient and sustainable alternative.

Key Policy Highlights and Global Context

India allows 2G ethanol exports, and the DGFT announcement highlights particular conditions for export to maintain sustainability:

• Mandatory licensing: Before conducting business internationally, exporters must get official export authorization.
• Feedstock certification: Businesses must demonstrate that their raw materials, including forestry waste, algae, grasses, rice, wheat, maize stover, sugarcane, and agricultural residues, are sourced in an ethically responsible manner.
• Environmental advantages: 2G ethanol reduces dependency on food crops, decreases food waste, and solves the problem of stubble burning, which is a significant source of CO₂ emissions in northern India, by using residues and garbage.

2G ethanol is becoming more and more popular worldwide as a transition to advanced biofuels, especially in Asia and South America. Its early achievement of the 20% ethanol blending target (E20) in gasoline by 2025, five years ahead of the initial 2030 date, is consistent with India’s policy change. Without placing further strain on food production, the drive for 2G will help meet future demand in a sustainable manner.

In the meantime, ethanol procurement is being rapidly expanded by Oil Marketing Companies (OMCs) in India. For the 2025–2026 supply year, OMCs requested bids on 10.5 billion liters of denatured anhydrous ethanol on September 23, 2025. About 8.2 billion liters of the 11.59 billion liters that the nation had contracted by August 2024–2025 had been supplied. This strong domestic demand emphasizes the importance of regulated export laws.

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India’s Growing 2G Ethanol Infrastructure

India has been making consistent investments in 2G ethanol production capacity to address the issues of agricultural residue and reduce its reliance on fossil fuels. Important projects consist of:

• Indian Oil Corporation Ltd (IOCL): The first commercial-scale 2G ethanol project in India was opened in August 2022 at Indian Oil Corporation Ltd.’s (IOCL) Panipat bio-refinery in Haryana. Approximately 30 million liters of ethanol are produced annually from the plant’s processing of 200,000 tonnes of rice straw. The plant, which was constructed using Praj Industries’ own “enfinity” technology, also addresses the issue of stubble burning in northern states. It was running at about 30% capacity by the middle of 2024.
• Hindustan Petroleum Corporation Ltd (HPCL): In Bathinda, Punjab, Hindustan Petroleum Corporation Ltd. (HPCL) is building a 100 KLPD plant that will use leftover rice and maize.
• Numaligarh Refinery Ltd (NRL): By late 2025, the first bamboo-based 2G bio-refinery in India is anticipated to be put into service in Assam by Numaligarh Refinery Ltd (NRL), which will produce 50,000 tons of ethanol annually.
• DBT-ICT Centre for Energy Biosciences: Using lignocellulosic biomass as feedstock, the DBT-ICT Centre for Energy Biosciences established India’s first 2G ethanol pilot plant in 2015 at India Glycols Ltd. in Kashipur.

These programs highlight how 2G ethanol can be used to promote environmental sustainability and energy security. With export prospects now available, India is well-positioned to emerge as a significant player in the global biofuels market.

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