India May Soon Cook With Ethanol Instead Of LPG As Government Drafts New Policy

The government is working on a policy framework to introduce ethanol as an alternative household cooking fuel alongside LPG, with possible subsidies and a dedicated supply chain under consideration.

The proposal aims to utilise surplus ethanol production while reducing India's dependence on imported LPG.

Source : ABPLIVE AI

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Key points generated by AI, verified by newsroom

• India explores expanding ethanol use as household cooking fuel.
• Surplus ethanol capacity reduces LPG import dependency.
• Government tests stoves; OMCs develop distribution infrastructure.

India could soon expand the use of ethanol beyond transport fuel, with the government working on a policy framework to introduce it as an alternative household cooking fuel alongside liquefied petroleum gas (LPG), according to industry executives.

The proposed framework, being prepared by the Ministry of Petroleum and Natural Gas, is expected to outline measures to support ethanol adoption, including possible subsidy mechanisms and the development of a dedicated supply chain, reported The Economic Times. Industry bodies representing fuel suppliers are also understood to be holding parallel consultations with the government on the proposal.

Citing industry executives familiar with the discussions, the report noted that the policy could be ready by September.

Policy May Include Subsidies And Distribution Network

Industry executives said the policy aims to position ethanol as a clean cooking fuel that can complement LPG in Indian households.

"An alternative clean cooking policy is in the works that would help ethanol to be adopted alongside LPG as a household cooking fuel," one industry executive told ET, requesting anonymity.

Another executive said the government may consider financial support to encourage adoption.

"To promote ethanol cooking, the government may roll out some sort of a subsidy scheme too that would be capital-driven (a one-time investment support) or an ongoing fiscal commitment," the executive said.

Besides subsidy support, the policy is also expected to focus on building the supply chain required for large-scale distribution of ethanol as a cooking fuel.

Surplus Ethanol Capacity Drives The Proposal

The push comes at a time when India has built significant ethanol production capacity.

According to a May report by CareEdge Ratings, the country's ethanol production capacity has crossed 20 billion litres annually, with another 4 billion litres expected to become operational during the current financial year.

Of the existing capacity, around 11 billion litres is consumed under the government's E20 petrol blending programme. Another 3-3.5 billion litres is used by liquor manufacturers, pharmaceutical companies and chemical producers, leaving an estimated 7 billion litres of unused production capacity.

Industry executives said utilising this surplus for cooking fuel could help diversify ethanol consumption while reducing India's dependence on imported LPG.

Oil Marketing Companies Testing Ethanol Cooking Solutions

The government has already begun exploring ethanol-based cooking technologies.

Earlier this year, media reports stated that ethanol-powered cooking stoves were being tested at the government's direction as a cleaner alternative for households.

Industry executives said oil marketing companies (OMCs) have also been undertaking research and development on ethanol-powered cooking stoves. They are understood to be evaluating potential partnerships or acquisitions involving existing ethanol cooking technologies.

To support distribution, OMCs could also be asked to introduce ethanol dispensing units at fuel retail outlets.

According to industry executives, consumers may be able to purchase ethanol in canisters through dedicated ethanol automated teller machines (ATMs) installed at petrol pumps for use with compatible cooking stoves.

Reducing LPG Import Dependence

Industry executives said the proposal has gained importance amid concerns over India's dependence on imported LPG.

"We all saw how the West Asia war impacted India's LPG supply. It is a good option to use excess ethanol capacity as an alternative fuel to LPG and reduce imports of the fuel," another industry executive said.

Although India has diversified its LPG sourcing since the conflict in West Asia began earlier this year, it continues to rely heavily on Gulf countries for imports. A substantial share of these supplies passes through the Strait of Hormuz, making the country vulnerable to geopolitical disruptions.

Following recent supply concerns, state-run oil marketing companies have also been preparing a strategic LPG storage plan aimed at maintaining nearly 30 days of reserves to strengthen energy security.

Export Opportunities Could Also Emerge

Industry executives said surplus ethanol capacity may also create export opportunities.

Neighbouring countries such as Nepal, Bangladesh and Indonesia have adopted 10 per cent ethanol blending targets but currently lack adequate feedstock and distillation capacity.

With domestic production continuing to rise, India could potentially supply ethanol to these markets while meeting its own requirements.

Clean Cooking Alternatives Could Lower Subsidy Burden

The proposal also aligns with broader efforts to diversify clean cooking fuels.

According to the International Institute for Sustainable Development's report, 'India's Clean Cooking Shift: Scaling Non-Fossil Fuel Solutions', released in February, transitioning to electric cooking and biogas could save India more than Rs 2 lakh crore (around $24 billion) in cumulative LPG subsidies by 2050.

While the report focuses on non-fossil fuel cooking solutions, industry executives believe expanding the use of ethanol could also contribute to reducing India's LPG dependence and strengthening long-term energy security.