Maize for Fuel: Managing India’s New Ethanol Reality

India’s ethanol programme has entered a decisive phase in 2026. What began as a sugarcane-led blending initiative has now transitioned into a grain-driven system, with maize emerging as the single largest feedstock. This shift has strengthened fuel security, but it has also introduced complex inter-sectoral pressures that require constant calibration. Managing this new reality has become central to sustaining ethanol blended petrol without triggering unintended economic or social consequences.

How Maize Emerged as India’s Leading Ethanol Feedstock

During the Ethanol Supply Year 2025–26, maize accounted for 45.68 percent, or roughly 479 crore litres, of the total 1,050 crore litre ethanol allocation. This marked a structural departure from earlier cycles dominated by sugar-based feedstocks.

Several factors drove this transition. Restrictions on sugar diversion following consecutive monsoon disruptions limited the availability of cane juice and molasses. To maintain blending targets, policy incentives were extended to grain-based ethanol, including higher procurement prices. In 2024–25, ethanol from maize fetched ₹71.86 per litre, significantly higher than ethanol derived from B-heavy or C-heavy molasses.

Equally important was supply resilience. Unlike sugarcane, maize is cultivated across multiple climatic zones and seasons, enabling year-round availability and reducing the vulnerability of ethanol production to regional crop failures.

Benefits of Maize-Based Ethanol for Energy Security

Maize has strengthened India’s ethanol programme in several critical ways:

• Stability of supply by decoupling fuel production from the sugar cycle
   
• Geographical diversification of distilleries closer to blending depots
   
• Reduced freshwater stress, as maize requires less water per litre of ethanol than sugarcane
   
• Foreign exchange savings through the substitution of imported fossil fuels with domestic bioethanol fuel
   
• Farmer income support, with maize prices remaining at or above MSP in major producing states
   

Together, these factors have made maize a dependable raw material for ethanol production in the current policy environment.

Impact on the Animal Feed and Poultry Industry

The rapid rise of maize-based ethanol has placed significant pressure on the poultry and animal feed sectors. Poultry alone consumes nearly 60 percent of India’s maize, and direct competition with distilleries has driven prices to ₹26–₹30 per kg during 2024–25.

Industry estimates for 2025–26 indicate a potential maize shortfall of 17 million tonnes, prompting calls for duty-free imports and alternative feed options. India has already shifted from being a net exporter of maize to a net importer to manage this gap.

At the same time, ethanol production has introduced DDGS as a viable feed substitute. With 27–32 percent protein content and pricing 10–15 percent lower than soybean meal on a protein-equivalent basis, DDGS now accounts for 30–40 percent of the protein meal market. India is expected to produce 2.45 million metric tonnes of DDGS in 2025–26, partially offsetting feed shortages.

The Importance of Inter-Industry Coordination

Maize for fuel cannot function in isolation. Coordination between agriculture, distilleries, oil marketing companies, and the feed sector has become essential.

Crop yield data from satellite monitoring informs grain diversion limits. Oil marketing companies rely on long-term offtake agreements to manage blending infrastructure. Automotive manufacturers align vehicle compatibility with fuel availability. Any misalignment across these links risks inflationary pressure, supply disruptions, or stranded investments.

This coordination has shifted ethanol management from static policy targets to continuous operational balancing.

Using Data to Balance Competing Sectoral Needs

By 2026, ethanol governance has become data-driven. Digital systems track maize availability, ethanol inventories, logistics bottlenecks, and environmental compliance in real time.

The Integrated Ethanol Management System enables oil companies to identify surplus and deficit regions and redirect supplies without creating redundant capacity. Input-cost tracking allows procurement prices to adjust when maize prices spike. Environmental data from online monitoring systems ensures that production expansion does not compromise water or pollution norms.

This data-led approach ensures that renewable ethanol growth does not translate into food inflation or environmental stress.

AIDA’s Role in Managing Feedstock Transitions

At the centre of this transition is All India Distillers’ Association, which acts as both a technical and policy integrator.

AIDA supports multi-feedstock flexibility, enabling distilleries to switch between maize, broken rice, and molasses within seven days based on availability. It shares best practices to improve ethanol yields from maize and maximise DDGS recovery. It also engages with policymakers to advocate predictable pricing frameworks and advance notice of allocation volumes for each Ethanol Supply Year.

Crucially, AIDA serves as the bridge between energy and agriculture, ensuring that the push for fuel security does not destabilise the poultry sector or distort grain markets.

Conclusion

Maize-based ethanol has become indispensable to India’s blending programme. It has delivered resilience, scale, and speed at a time when energy security demands domestic solutions. Yet its success depends on careful management of downstream effects across agriculture and food systems.

The 2026 reality makes one point clear. Maize for fuel is not merely a production decision. It is a continuous balancing exercise requiring data, coordination, and institutional oversight. By guiding this transition with a measured, feedstock-neutral approach, AIDA has positioned the ethanol sector to support energy security without undermining economic or social stability.