Ethanol as cooking fuel? Govt working on policy framework, says report
The government may consider a subsidy scheme for ethanol cooking that could either be capital-driven, through one-time investment support, or involve an ongoing fiscal commitment.
- Jul 20, 2026,
- Updated Jul 20, 2026 12:05 PM IST
The government is reportedly working on a policy framework to introduce ethanol as a mainstream cooking fuel, with the move aimed at helping it gain acceptance alongside LPG in households.
According to a report in The Economic Times that cited industry executives aware of the development, the proposed framework is expected to cover subsidies and supply chain creation, while industry bodies representing fuel suppliers are also in parallel consultations with the government.
One executive said the policy could be ready by September. The push comes as India has surplus ethanol capacity and is looking at ways to reduce its dependence on LPG and contain its rising fuel bill, stated the report.
Industry executives said the government may consider a subsidy scheme for ethanol cooking that could either be capital-driven, through one-time investment support, or involve an ongoing fiscal commitment. Ethanol, a green fuel produced by the fermentation of sugars and grains, is already being examined as a cleaner household fuel alternative.
There have been earlier reports that at the behest of the government, ethanol-based cooking stoves were being tested. Oil marketing companies are also said to be undertaking research and development on ethanol-based stoves and exploring possible partnerships or acquisitions involving available ethanol cooking technologies.
Executives said that, for the scheme to be launched, oil marketing companies could be asked to set up ethanol automated teller machines, or ATMs, where users could procure ethanol in canisters for the stoves. These ATMs could be placed at the fuel retail outlets of oil companies.
The country's ethanol production capacity has crossed 20 billion litres a year, with another 4 billion litres set to come onstream in this financial year, according to a CareEdge Ratings report released in May. Of this, about 11 billion litres a year is used for the government's E20 blending programme, while liquor makers, pharmaceutical companies and chemical manufacturers consume another 3 billion to 3.5 billion litres, leaving nearly 7 billion litres of unused capacity.
With this surplus capacity, India may also look at exporting ethanol to neighbouring countries, including Nepal, Bangladesh and Indonesia, which have 10 per cent ethanol blending targets but lack adequate feedstock and distilling capacity.
The government is reportedly working on a policy framework to introduce ethanol as a mainstream cooking fuel, with the move aimed at helping it gain acceptance alongside LPG in households.
According to a report in The Economic Times that cited industry executives aware of the development, the proposed framework is expected to cover subsidies and supply chain creation, while industry bodies representing fuel suppliers are also in parallel consultations with the government.
One executive said the policy could be ready by September. The push comes as India has surplus ethanol capacity and is looking at ways to reduce its dependence on LPG and contain its rising fuel bill, stated the report.
Industry executives said the government may consider a subsidy scheme for ethanol cooking that could either be capital-driven, through one-time investment support, or involve an ongoing fiscal commitment. Ethanol, a green fuel produced by the fermentation of sugars and grains, is already being examined as a cleaner household fuel alternative.
There have been earlier reports that at the behest of the government, ethanol-based cooking stoves were being tested. Oil marketing companies are also said to be undertaking research and development on ethanol-based stoves and exploring possible partnerships or acquisitions involving available ethanol cooking technologies.
Executives said that, for the scheme to be launched, oil marketing companies could be asked to set up ethanol automated teller machines, or ATMs, where users could procure ethanol in canisters for the stoves. These ATMs could be placed at the fuel retail outlets of oil companies.
The country's ethanol production capacity has crossed 20 billion litres a year, with another 4 billion litres set to come onstream in this financial year, according to a CareEdge Ratings report released in May. Of this, about 11 billion litres a year is used for the government's E20 blending programme, while liquor makers, pharmaceutical companies and chemical manufacturers consume another 3 billion to 3.5 billion litres, leaving nearly 7 billion litres of unused capacity.
With this surplus capacity, India may also look at exporting ethanol to neighbouring countries, including Nepal, Bangladesh and Indonesia, which have 10 per cent ethanol blending targets but lack adequate feedstock and distilling capacity.