Why in news?
The government amended its export policy on 24 September 2025, allowing the export of second‑generation (2G) ethanol. This reflects growing confidence in India’s ability to produce sustainable biofuels at scale.
What is 2G ethanol?
- 2G ethanol is produced from non‑food lignocellulosic biomass such as rice and wheat straw, bagasse, bamboo, corn cobs and forestry residues. These materials are pre‑treated, enzymatically broken down and fermented into ethanol.
- It differs from first‑generation ethanol, which is made from food crops like sugarcane and corn. Using waste residues avoids competition with food and reduces environmental impact.
Advantages
- Utilises agricultural waste, reducing stubble burning and pollution. Provides additional income for farmers who supply crop residues.
- Reduces greenhouse gas emissions by 80–100% compared with fossil fuels, depending on the feedstock and process.
- Helps achieve blending targets without diverting food crops, thereby supporting food security.
Indian initiatives
- The National Policy on Biofuels 2018 targets 20% ethanol blending in petrol by 2025 and encourages 2G bio‑refineries.
- Hindustan Petroleum Corporation Limited (HPCL) commissioned India’s first commercial 2G ethanol plant in Bathinda, Punjab, in 2022, processing rice straw. More plants are planned in Uttar Pradesh, Odisha and Chhattisgarh.
- The government offers viability gap funding, soft loans and fiscal incentives for 2G projects. Several public and private collaborations are underway.
Challenges
- High capital costs and technological complexity make 2G ethanol more expensive than conventional ethanol. Scaling up requires innovation and cost reduction.
- A steady supply of crop residues needs efficient collection, storage and transport systems. Farmers must be incentivised to sell residues rather than burn them.
- Production enzymes and technology are often imported; indigenous R&D is needed to lower costs.
Significance of export relaxation
- Allowing exports gives producers access to global markets, improving profitability and motivating investment in 2G projects.
- Positions India as a supplier of sustainable fuels and related technology to other countries.
Conclusion
Second‑generation ethanol offers a win‑win solution for clean energy, farmer welfare and pollution control. Supportive policies and technological breakthroughs will determine how quickly it scales up.