Ethanol Distilleries Grapple with Unfair Allocation Amid New Tender Controversy

Over 350 operational distilleries face challenges due to an ethanol tender prioritizing newcomers, causing concerns among industry bodies. Existing facilities are overlooked, causing economic and environmental inefficiencies. Calls for policy intervention highlight a need for fair demand distribution to ensure India's ethanol programme's sustainability.

More than 350 distilleries across India are navigating uncertain waters as they grapple with inadequate procurement orders under the latest ethanol tender. Industry voices are raising the alarm about a controversial allocation methodology that seems to prioritize new players over established units.

The Ethanol Supply Year 2025-26 tender by Oil Marketing Companies (OMCs) is facing criticism for allegedly sidelining distilleries that were promised consideration based on prior government commitments. The tender document categorizes regions with insufficient local offers as deficit zones, aiming to ensure all local offers are fully allocated.

However, industry experts like C K Jain, President of the Grain Ethanol Manufacturers Association (GEMA), argue that this approach skips over surplus capacities in neighboring states. Such disregard for existing infrastructure undercuts the overall economic and environmental efficiency, while also threatening the long-term sustainability of the country's ethanol ecosystem.

(With inputs from agencies.)