New Delhi: The Centre is preparing to seek Cabinet approval to reduce the share of broken rice in grains distributed under the public distribution system (PDS) from 25 percent to 10 percent, a move expected to release about 90 lakh tonnes annually for the ethanol sector. Food Secretary Sanjeev Chopra said the proposal is designed to create a stable, year-round supply of feedstock for ethanol producers, reducing reliance on whole grain stocks held by the Food Corporation of India (FCI).
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"Climate change is a reality. We need to make sure the supply chain is not disrupted. A steady supply of broken rice to the ethanol sector will help ensure that," he said at the All India Distillers' Association (AIDA) conference.
Currently, PDS grain supplies include 25 percent broken rice for distribution to around 80 crore beneficiaries. The proposed revision would lower this proportion to 10 percent.
The excess broken rice — drawn from the roughly 360–370 lakh tonnes of rice distributed annually — will be channelled to ethanol producers, animal feed makers and other users through auctions. A pilot has already been carried out in five states.
Chopra said the government will discontinue supplying whole-grain FCI rice to distilleries from the next year, replacing it with broken rice under the revised system.
"Looking further ahead, from the next ethanol supply year, whole FCI rice will no longer be available for the sector. In its place, we are moving toward the supply of broken rice, a change that addresses multiple objectives simultaneously."
He added that the move would improve grain quality for PDS beneficiaries, ease storage and logistics constraints, and ensure a predictable feedstock pipeline for ethanol production.
The proposal comes as global crude oil prices have surged sharply, with Brent rising nearly 40 percent from USD 60–70 per barrel levels seen three weeks ago, increasing pressure on India to accelerate ethanol blending.
Chopra said ethanol blending in petrol has already reached 20 percent, compared with 1.5 percent in 2013, helping save over Rs 1.63 lakh crore in foreign exchange and reducing crude oil imports by 277 lakh metric tonne since 2014.
Production capacity has expanded from 420 crore litres in 2013-14 to nearly 2,000 crore litres currently, including 650 crore litres added in the past three years.
With supply capacities scaling up, the government is now turning its attention to expanding demand, Chopra said, noting that increasing blending beyond 20 percent, introducing ethanol blending in diesel and promoting flex-fuel vehicles are under active consideration.
He linked the policy shift to past supply disruptions, particularly in 2023, when weak sugar output and concerns over rice production led to curbs on feedstock availability for distilleries. The proposed restructuring is aimed at avoiding similar disruptions.
Chopra also called on distilleries to accelerate offtake of existing FCI rice allocations. Of the 52 lakh tonnes earmarked for the current supply year, only 21 lakh tonnes have been lifted so far, with another 20 lakh tonnes still available at discounted rates until June 30.
On alternative feedstocks, he said maize — especially rain-fed varieties — is being promoted to encourage crop diversification away from paddy. Around 40 percent of ethanol production already comes from grain-based sources, largely maize, with efforts underway to develop high-yield varieties producing five to six tonnes per hectare.
Drawing a parallel with Brazil’s response to the 1973 oil shock, Chopra said India’s current energy situation presents a similar opportunity.
"Every challenge carries within it an opportunity. This is an important moment for us to revisit and strengthen our ethanol blending programme," he said.
AIDA President Vijendra Singh said the industry is ready to move beyond the current E20 benchmark and called for a gradual increase in blending mandates. The industry also sought the introduction of flex-fuel vehicles capable of running on 100 percent ethanol, wider adoption of ethanol-based cooking solutions, and exploration of ethanol blending in diesel.
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PS Ravi, Director (Downstream) at the Federation of Indian Petroleum Industry, urged the sector to support expansion beyond petrol blending, highlighting biodiesel in diesel, ethanol as a cooking fuel, sustainable aviation fuel, and feedstock development as key areas of focus.