Industry
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INDUSTRY STATUS & FUTURE SCOPE
Biofuel Current Industry Scenario
- Ethanol blending reached nearly 2%–20%, achieving the 2030 target years ahead of schedule.
- Total ethanol production capacity scaled to nearly 9 billion litres by late 2025.
- Grain-based feedstocks account for roughly 50% of total production capacity (~9.97 billion litres).
- Renewable capacity reached 75 GW by mid-2026, ranking India 3rd globally.
- Power sector emissions flatlined for two years due to a massive clean-energy surge.
India is emerging as one of the world’s fastest-growing bioenergy markets, driven by ethanol blending, compressed biogas (CBG), biodiesel, sustainable aviation fuel (SAF) and waste-to-energy technologies.
India's biofuel industry
- Ethanol blending achieved 20% by November 2025–June 2026 average. Annual ethanol produc
tion capacity 2,000 Cr L Appro ximately, in 2026 - Commissioned CBG plants 217+ as of August 202. New national CBG scheme ₹
23,731 Cr approved August 2026
Bioethanol: India achieved its E20 petrol-blending milestone ahead of the original 2030 target, creating a large domestic market for ethanol and distillery technologies.
Compressed Biogas (CBG/Bio-CNG): More than 217 plants are commissioned, with agricultural waste, press mud, cattle dung and municipal organic waste providing major feedstock opportunities.
Biodiesel: A developing segment with potential in used cooking oil, non-edible oils and waste-derived feedstocks, although commercial scale-up remains challenging.
Biomass and bioenergy: Biomass pellets, briquettes, cogeneration, biorefineries and industrial bioenergy systems are expanding opportunities across agriculture, manufacturing and power generation.
- The newly launched ₹23,731 crore GOBARdhan scheme, covering FY 2026–27 through FY 2035–36, aims to increase domestic CBG production nearly tenfold. It includes assured offtake, pricing support, capital assistance and financing measures.
- Sustainable Aviation Fuel: An emerging market supported by India’s proposed aviation blending milestones.
INDUSTRY POTENTIAL & GROWTH
Future growth projections to 2030
The IEA’s January 2026 report provides two scenarios for India’s combined liquid and gaseous biofuel consumption. The accelerated scenario depends on stronger policies, adequate feedstock and infrastructure expansion.
Main-case growth: From 293 PJ in 2025 to 429 PJ in 2030, approximately 46% growth.
Accelerated growth: Potential to reach 609 PJ by 2030, more than double the 2025 level.
Major growth drivers: Ethanol, CBG, biodiesel and emerging advanced biofuels.
Long-term potential: Reduced fossil-fuel imports, new agricultural revenue, rural employment, waste utilisation and cleaner industrial fuels.
Government targets and growth drivers
| Biofuel sector | Official target or policy milestone |
|---|---|
| Bioethanol | E20 achieved in 2025–26; no higher nationwide blending target approved |
| Compressed Biogas | 3% blending in FY 2026–27, rising to 5% from FY 2028–29 |
| Biodiesel | Indicative 5% diesel-blending target by 2030 |
| Sustainable Aviation Fuel | Indicative blending of 1% in 2027, 2% in 2028 and 5% in 2030, initially for international flights |
| Biomass pellets | Policy supports 5–7% co-firing in coal-based thermal power plants |
Major investment and business opportunities
| Industry segment | Future growth potential |
|---|---|
| 1G & 2G Bioethanol | Distilleries, enzyme technologies, agricultural-residue processing |
| CBG & Bio-CNG | Biogas plants, gas upgrading, storage and pipeline infrastructure |
| Biodiesel & Renewable Diesel | Waste-oil collection, purification and fuel production |
| Sustainable Aviation Fuel | Bio-refineries, advanced conversion technologies and aviation fuel supply |
| Biomass & Bioenergy | Pellets, briquettes, boilers and industrial cogeneration |
| Sugar–Ethanol Integration | Integrated sugar mills, by-product valorisation and process technology |
| Bio-Processing Technology | Fermentation, distillation, dehydration and automation |
| Waste-to-Energy | Municipal solid waste, animal waste and agricultural residues |