MACROECONOMIC OVERVIEW
Global Economy
Overview:
The global economy entered 2026 at an important inflection point. Following several years of recovery from the pandemic and subsequent inflationary shocks, global economic activity demonstrated greater resilience than anticipated. According to the International Monetary Fund (IMF), stronger labour markets, resilient consumer spending and sustained investment supported economic activity despite elevated uncertainty. However, the foundations of global growth are increasingly being reshaped by structural rather than cyclical forces, as geopolitical developments, evolving trade relationships and rapid technological transformation redefine the global economic landscape.
The IMF projects global GDP growth of 3.0% in 2026, improving to 3.4% in 2027, remaining below the 3.5% average recorded during 2024-25. The latest World Economic Outlook Update describes the global economy as being shaped by crosscurrents of war and technology where the lingering effects of geopolitical conflict and energy market disruptions are increasingly being offset by a technology-led investment cycle driven by rapid advances in artificial intelligence and digital innovation. Consequently, economic performance is becoming increasingly differentiated, with countries integrated into global technology value chains outperforming those more exposed to energy price volatility and geopolitical disruptions.
The broader macroeconomic environment is also undergoing a structural realignment. The reconfiguration of global supply chains, increasing geoeconomic fragmentation and the emergence of strategic industrial policies are reshaping patterns of international trade, manufacturing and capital allocation. Governments are placing greater emphasis on economic resilience by strengthening domestic manufacturing capabilities, securing critical supply chains and investing in strategic technologies. This marks a gradual transition from a globalisation model primarily driven by cost optimisation towards one increasingly centred on resilience, security and long-term competitiveness.
While inflation has moderated significantly from the peaks experienced in recent years, the disinflationary process has slowed. The IMF now projects global headline inflation of 4.7% in 2026, reflecting renewed pressures from higher commodity prices and geopolitical developments. Although several central banks have begun easing monetary policy, financial conditions remain tighter than pre-pandemic norms, while elevated sovereign debt levels and fiscal consolidation measures continue to influence investment, borrowing costs and economic activity across both advanced and emerging economies.
At the same time, the underlying strength of the global economy remains uneven. Economic activity in the worlds largest economies has generally exceeded earlier expectations, yet this performance masks structural imbalances. Growth patterns continue to diverge across regions, with domestic demand, labour markets and investment conditions evolving at different speeds. Elevated policy uncertainty and geopolitical risks continue to weigh on medium-term growth prospects, reinforcing a cautious global outlook.
According to the IMF, global growth is projected at 3.1% in 2026, with the conflict interrupting what had previously been a stronger growth trajectory. Inflation, after showing signs of moderation, is expected to edge higher as commodity price pressures re-emerge. While downside risks continue to dominate the near-term outlook, the IMF also highlights that continued technological progress particularly advances in artificial intelligence and supportive structural reforms could strengthen productivity and support a higher medium-term growth path.
The evolving macroeconomic landscape reflects a broader structural transition in the global economy. As nations navigate geopolitical uncertainty, shifting trade relationships and heightened concerns around energy security, resilience is becoming as important as efficiency. The ability to diversify supply chains, strengthen domestic industrial capabilities and secure reliable sources of energy will increasingly shape long-term economic competitiveness and sustainable growth.
Rational growth (%)
| Particulars | 2023 | 2024 | 2025 | 2026F |
| World Output | 3.3 | 3.3 | 3.3 | 3.1 |
| Advanced Economies | 1.8 | 1.9 | 1.9 | 1.8 |
| Emerging Market & Developing Economies | 4.4 | 4.3 | 4.3 | 3.7 |
Source: IMF World Economic Outlook, April 2026 (Reference Forecast).
| Economy | 2025 | 2026F | Key Commentary |
| United States | 1.9 | 1.8 | Growth is projected to remain steady but moderate, reflecting softer domestic demand and elevated uncertainty. |
| China | 4.8 | 4.2 | Growth is expected to ease as property-sector weakness and softer domestic demand weigh on momentum. |
| United Kingdom | 1.2 | 1.4 | Growth is projected to improve gradually, supported by easing inflation and recovering consumption. |
| Japan | 0.7 | 0.5 | Growth is expected to remain subdued amid weak domestic demand and demographic pressures. |
| Germany | 0.1 | 0.9 | Growth is projected to recover modestly after a weak 2025, supported by improving industrial activity. |
Global Economic Outlook
According to the International Monetary Funds (IMF) World Economic Outlook Update (July 2026), the global economy is projected to grow by 3.0% in 2026 and 3.4% in 2027, reflecting resilience despite an increasingly complex geopolitical and macroeconomic environment. The outlook is being shaped by two opposing forces: the lingering impact of geopolitical conflicts and energy market disruptions on one hand, and a technology-driven investment cycle led by artificial intelligence and digital innovation on the other. While the global economy has demonstrated resilience, growth is expected to remain uneven across countries depending on their exposure to energy price shocks, global trade and participation in technology value chains.
The IMF highlights that risks to the outlook remain tilted to the downside. Continued geopolitical tensions, elevated policy uncertainty, supply chain disruptions and commodity price volatility could tighten global financial conditions and place additional pressure on inflation, particularly for energy-importing and developing economies. At the same time, rapid adoption of artificial intelligence, digitalisation and productivity-enhancing technologies presents a significant opportunity to improve long-term economic growth and competitiveness. Countries that successfully combine technological innovation with structural reforms and investment-friendly policies are expected to outperform over the medium term.
Global investment priorities are also undergoing a structural transformation. According to the International Energy Agencys (IEA) World Energy Investment 2026 report, global energy investment is expected to reach a record US$3.4 trillion in 2026, with approximately US$2.2 trillion directed towards clean energy technologies including renewable power, electricity grids, battery storage, nuclear energy, low-emissions fuels, energy efficiency and electrification almost double the investment in fossil fuels. Electricity-related investment alone is projected to approach US$1.6 trillion, reflecting the growing importance of grid expansion, storage and electrification in supporting future economic growth.
These investment trends underscore a broader shift in global economic priorities. Energy security, industrial competitiveness and sustainability are increasingly viewed as complementary objectives rather than competing goals. Governments across advanced and emerging economies are accelerating investments in domestic manufacturing, resilient supply chains, clean energy infrastructure and strategic technologies to reduce import dependence and strengthen long-term economic resilience. The growing emphasis on diversified energy sources, including biofuels, sustainable aviation fuel, hydrogen and other low-carbon solutions, is expected to create substantial opportunities for businesses operating across the clean energy value chain.
While short-term uncertainties remain elevated, the long-term outlook continues to favour organisations that are agile, innovation-driven and aligned with the evolving priorities of energy security, technological advancement and sustainable development. Businesses that invest in operational resilience, resource efficiency, digital capabilities and low-carbon technologies will be better positioned to create enduring value while contributing to a more secure, competitive and sustainable global economy.
The transition towards a more resilient global economy is also reshaping capital allocation and industrial development. Governments are increasingly adopting integrated industrial policies that combine energy security, climate action and economic competitiveness, resulting in higher investments across clean fuels, advanced manufacturing, critical minerals, digital infrastructure and circular economy solutions. As supply chains become more regionalised and countries seek greater self-reliance in strategic sectors, businesses with scalable technologies, diversified feedstock capabilities, robust operational platforms and strong sustainability credentials are expected to be better positioned to capture emerging growth opportunities. These structural shifts are reinforcing the role of the bioeconomy as a key enabler of sustainable industrialisation, rural development and long-term energy resilience.
Indian Economic Review
India is expected to remain one of the fastest-growing major economies despite a challenging global environment marked by geopolitical tensions, elevated policy uncertainty and slower global trade. According to the IMF, Indias growth is projected at 6.2% in 2025 and 6.3% in 2026, supported primarily by resilient domestic demand and sustained economic activity.
Compared with other major economies, Indias growth continues to significantly outperform the global average, underlining the strength of its domestic market and relatively lower dependence on external demand. The countrys economic resilience is expected to remain an important driver of global growth over the medium term.
Inflation is projected to remain broadly aligned with the Reserve Bank of Indias medium-term target. The IMF assumes that monetary policy will continue to support price stability while remaining consistent with sustaining economic growth over the forecast horizon.
| United States | 30.5 |
| China | 19.2 |
| Germany | 4.7 |
| India | 4.4 |
| Japan \u2022 | 4.2 |
| United Kingdom * * | 3.4 |
| France Rs. | 3.2 |
| Italy Rs. ) | 2.4 |
| Canada | 2.2 |
| Brazil | 2.1 |
Growth of the Indian Economy
| Calendar Year | 2024 | 2025E | 2026F | 2027F |
| Real GDP Growth (%) | 6.5 | 6.2 | 7.0 | 6.4 |
E = Estimate; F = Forecast.
Source: International Monetary Fund (IMF), World Economic Outlook Update, July 2026
Indias Growth in Global Context
| Economy | 2025 | 2026F | 2027F |
| India | 7.7 | 6.4 | 6.7 |
| World | 3.5 | 3.0 | 3.4 |
| Emerging Market & Developing Economies | 4.5 | 3.8 | 4.5 |
| Advanced Economies | 1.9 | 1.7 | 1.8 |
E = Estimate; F = Forecast.
Source: International Monetary Fund (IMF), World Economic Outlook Update, July 2026
Sectoral Performance
Indias economic growth during FY 2025-26 was supported by broad-based expansion across services, manufacturing, infrastructure, agriculture and the energy sector. Continued policy reforms, rising domestic consumption and sustained public and private investment reinforced economic resilience despite an uncertain global environment. At the same time, energy has emerged as a strategic pillar of Indias growth story, not only as an enabler of industrial development but also as a cornerstone of energy security, climate resilience and long-term economic competitiveness.
| Manufacturing | Manufacturing emerged as one of the strongest contributors to growth, expanding by 7.0%, compared with 4.5% in FY 2024-25. The improvement was driven by stronger industrial output, robust domestic demand, improving capacity utilisation and continued support under the Production Linked Incentive (PLI) schemes. The Economic Survey also emphasises that the next phase of manufacturing growth will depend on greater innovation, R&D investment and deeper integration into global value chains. (Invest India) |
| Services | The services sector remained the primary growth engine, expanding by 9.1% and accounting for approximately 54% of GDP during the first half of FY 2025-26. Financial, real estate and professional services grew by 9.9%, while trade, hotels, transport and communication expanded by 7.5%, reinforcing Indias position as a leading global services economy. (Invest India) |
| Agriculture | Agriculture, livestock, forestry and fishing registered growth of 3.1%, providing continued support to rural incomes and food security despite an elevated base. The sector continues to diversify beyond food production, with increasing opportunities emerging across biofuels, renewable feedstocks and value-added agri-processing. (Invest India) |
| Construction & Infrastructure | Construction activity remained robust, growing by 7.0%, supported by sustained public capital expenditure and private investment. Gross Fixed Capital Formation (GFCF) is estimated to grow by 7.8%, reflecting continued investments in infrastructure, logistics, industrial corridors and urban development. (Invest India) |
| Energy & Industrial Transition | Energy is increasingly becoming a strategic growth enabler rather than a standalone sector. Continued investments in renewable energy, biofuels, green hydrogen, transmission infrastructure and domestic energy manufacturing are strengthening Indias energy security while supporting industrial competitiveness. The Economic Survey highlights the need for strategic resilience, domestic capacity building and lower import dependence as India advances its long-term industrial and energy transition agenda. |
Trade & Investment
Domestic demand continued to anchor economic growth. Private Final Consumption Expenditure (PFCE) is estimated to grow by 7.0%, while Gross Fixed Capital Formation (GFCF) is projected to expand by 7.8%, reflecting healthy investment activity. Exports are estimated to grow by 6.4%, supported by resilient services exports and improving manufacturing competitiveness despite a challenging global trade environment.
Capital Markets: Deepening Participation and Financing Indias Growth
Indias capital markets continued to strengthen as a key pillar of economic growth, supporting capital formation, financial inclusion and long-term investment. Backed by a robust regulatory framework, expanding domestic investor participation and increasing institutional depth, Indias capital markets have demonstrated resilience despite global geopolitical uncertainties and market volatility. Continued reforms by the Securities and Exchange Board of India (SEBI) have enhanced market transparency, governance and investor protection, reinforcing Indias attractiveness as a global investment destination.
Domestic participation remained the defining feature of market growth. The mutual fund industrys Assets Under Management (AUM) reached approximately Rs.65.7 lakh crore by the end of FY 2024-25 and further increased to Rs.73.7 lakh crore as of March 2026, reflecting sustained investor confidence and disciplined long-term investing. The industry also recorded over 23 crore investor folios, highlighting the continued broadening of Indias retail investment base.
Indias primary markets also maintained healthy momentum, supported by strong investor appetite for quality businesses across manufacturing, infrastructure, technology and clean energy. Robust equity fundraising through initial public offerings (IPOs), qualified institutional placements (QIPs) and other market instruments has enabled companies to finance expansion while deepening the countrys capital formation ecosystem. Indias growing prominence in global equity markets continues to position it among the worlds leading destinations for public listings and long-term capital.
The growing maturity of Indias capital markets is expected to play a critical role in financing the countrys long-term development priorities, including infrastructure, manufacturing, digital transformation and the energy transition. Increasing adoption of sustainable finance, green bonds and ESG-linked investments is creating new avenues for mobilising capital towards renewable energy, biofuels and other low-carbon technologies, supporting Indias vision of sustainable and investment-led growth.
| Indicator | FY 2025-26 |
| Mutual Fund AUM | Rs.73.7 lakh crore |
| Mutual Fund Investor Folios | 23+ crore |
| Net Mutual Fund AUM (Mar 2026) | Rs.73.7 lakh crore |
| Key Growth Drivers | Retail participation, SIP inflows, digital investing |
| Strategic Focus | Infrastructure, manufacturing, clean energy & sustainable finance |
Outlook
India is expected to remain among the worlds fastest-growing major economies, supported by strong macroeconomic fundamentals and resilient domestic demand. The Economic Survey 2025-26 projects real GDP growth in the range of 6.8%-7.2% for FY 2026-27, with private consumption, manufacturing, infrastructure investment and a vibrant services sector continuing to underpin economic expansion. As India strengthens its position in global value chains and advances from import substitution towards strategic resilience and competitiveness, sustained investments in clean energy, advanced manufacturing, digital innovation and infrastructure are expected to enhance productivity, reinforce energy security and support long-term, sustainable growth.
Key Takeaway :
India is expected to grow at nearly twice the global average and more than three times the pace of advanced economies, reinforcing its position as the worlds fastest-growing major economy.
Global Biofuels Sector Review
The global biofuels industry is undergoing a fundamental transformation, evolving from a climate-driven policy initiative into a strategic pillar of energy security, industrial competitiveness and sustainable economic growth. Rising geopolitical tensions, volatile fossil fuel markets and increasingly ambitious decarbonisation targets have accelerated the adoption of renewable transport fuels across major economies. Governments are no longer viewing biofuels solely as an emissions reduction tool, but as a means to reduce dependence on imported crude oil, strengthen domestic supply chains, enhance farmer incomes and create resilient, low-carbon energy systems.
Global biofuel production reached a record 192 billion litres in 2024, comprising approximately 121 billion litres of ethanol, 50 billion litres of biodiesel, 20 billion litres of renewable diesel (HVO) and 1.44 billion litres of sustainable aviation fuel (SAF). Looking ahead, the International Energy Agency (IEA) projects global biofuel demand to increase to approximately 238 billion litres by 2030 under its main-case scenario, with stronger policy support potentially driving demand to 310 billion litres. This growth is expected to be underpinned by expanding biofuel mandates, energy security priorities and accelerating decarbonisation efforts, particularly across emerging economies, while SAF is anticipated to be the fastest-growing segment of the renewable fuels market. Ethanol remains the dominant biofuel, accounting for nearly two-thirds of global production, while renewable diesel and SAF are emerging as the fastest-growing segments, driven by increasing demand from heavy transport and aviation sectors. Biofuels today contribute nearly 90% of all renewable energy consumed in the transport sector, underscoring their critical role in decarbonising mobility using existing fuel infrastructure.
Policy support continues to be the primary catalyst for industry expansion. Major economies, including
Regional Outlook
Regional Biofuels Landscape
| Region | Market Drivers | Key Biofuels | Growth Outlook |
| Asia Pacific | Strong government mandates, rising transport fuel demand, energy security initiatives and expanding export opportunities. | Ethanol, Biodiesel, Sustainable Aviation Fuel (SAF) | Expected to remain the fastest- growing region, led by India, Indonesia and China. |
| Europe | RED III implementation, Fit-for-55 package, increasing SAF mandates and decarbonisation policies. | Biodiesel, Renewable Diesel (HVO), SAF, Advanced Biofuels | Growth supported by stringent climate regulations and aviation decarbonisation targets. |
| North America | Renewable Fuel Standard (RFS), Low Carbon Fuel Standards (LCFS) and growing renewable diesel capacity. | Corn Ethanol, Renewable Diesel, SAF | Mature market with continued expansion in renewable diesel and SAF investments. |
| Latin America | High sugarcane availability, established ethanol ecosystem and supportive blending mandates. | Sugarcane Ethanol, Biodiesel | Stable long-term growth driven by Brazils expanding ethanol and biodiesel programmes. |
| Africa | Emerging biofuel policies, improving energy access and increasing investment in local bioenergy projects. | Ethanol, Biodiesel | Long-term growth potential supported by abundant agricultural resources and rising energy demand. |
Asia Pacific
Asia Pacific is expected to remain the fastest-growing biofuels market globally, driven by rising transport fuel demand, energy security concerns and supportive government policies. According to the IEA, India, Indonesia and China will account for a significant share of global biofuel demand growth through 2030. India has accelerated the nationwide rollout of E20 petrol while expanding its focus beyond ethanol towards compressed biogas (CBG), biodiesel and Sustainable Aviation Fuel (SAF). Indonesia continues to strengthen its biodiesel programme through the B40 mandate, while China is expected to increase biodiesel and renewable fuel consumption as part of its broader decarbonisation strategy. Across the region, governments are increasingly positioning biofuels as a strategic tool to reduce oil import dependence, strengthen rural economies and improve energy security.
Europe
Europe continues to lead the global transition towards advanced biofuels through a strong regulatory framework. The Renewable Energy Directive (RED III) has significantly strengthened renewable energy targets for transport, requiring either 29% renewable energy in transport or a 14.5% reduction in greenhouse gas intensity by 2030. RED III also establishes a 5.5% target for advanced biofuels and renewable fuels of non-biological origin, reinforcing Europes leadership in Sustainable Aviation Fuel (SAF), renewable diesel and advanced biofuels. Increasing sustainability requirements, digital traceability systems and the Union Database for Biofuels are further enhancing market transparency and strengthening investor confidence.
North America
North America remains one of the worlds most mature biofuel markets, supported by established production capacity, integrated supply chains and stable policy frameworks. The United States continues to lead global ethanol production under the Renewable Fuel Standard (RFS), while renewable diesel and SAF capacity continue to expand. Canada is strengthening demand through its Clean Fuel Regulations, encouraging higher blending levels and lower lifecycle emissions. Although policy uncertainty remains a potential risk, the region continues to attract significant investments in next-generation biofuels and refining capacity.
Latin America
Latin America remains a global leader in sugarcane-based biofuels, supported by abundant feedstock availability and decades of policy experience. Brazil is expected to account for nearly half of the global increase in biofuel demand through 2030, following the enactment of the Fuel of the Future legislation, which increases ethanol and biodiesel blending while introducing greenhouse gas targets for aviation fuels. The regions integrated sugar-energy ecosystem and competitive production economics continue to make it one of the worlds lowest-cost producers of renewable fuels.
Africa
Africas biofuels sector remains at an early stage of development but presents significant long-term potential due to its abundant agricultural resources and growing energy demand. While several countries have introduced blending mandates and bioenergy strategies, the pace of development will depend on investments in feedstock supply chains, infrastructure and enabling policy frameworks. The IEA considers Africa an emerging market where bioenergy could play an increasingly important role in improving energy access, supporting rural development and reducing dependence on imported fuels.
Global Perspective
As the biofuels industry enters its next phase of growth, policy alignment, international collaboration and investment will be critical to unlocking its full potential. According to the IEA, bioenergy is expected to account for approximately 95% of renewable fuel demand growth through 2030, with China, Brazil, Europe, India and the United States contributing more than two-thirds of global renewable fuel demand growth. The increasing convergence of energy security, industrial policy and climate action is reshaping the global biofuels landscape, creating significant opportunities for countries with strong agricultural resources, diversified feedstocks and supportive policy ecosystems. In this evolving landscape, India has emerged as one of the worlds most dynamic biofuel markets, combining ambitious policy reforms with expanding production capacity and increasing global leadership through initiatives such as the Global Biofuels Alliance.
Global Policy & Market Landscape
| Country / Region | Primary Biofuel | Policy Milestone (2025-26) | Key Numbers | Strategic Focus |
| United States | Corn Ethanol | Renewable Fuel Standard (RFS) continues to support ethanol, renewable diesel and SAF production. | 58 bn litres ethanol production annually; SAF Grand Challenge: 11 bn litres/year by 2030. | Energy security, transport decarbonisation and advanced biofuels. |
| Brazil | Sugarcane Ethanol | Ethanol blending increased to E30 and biodiesel to B15 under the Fuel of the Future programme. | Worlds 2nd largest ethanol producer; expected to contribute 40% of global biofuel demand growth through 2030. | Flex-fuel mobility, exports and low- carbon fuels. |
| European Union | Biodiesel, Renewable Diesel (HVO), SAF | RED III mandates 29% renewable energy in transport (or 14.5% GHG intensity reduction) by 2030, including a 5.5% advanced fuels target. | 16.8 bn litres biodiesel, renewable diesel and SAF produced in 2024. | Low-carbon transport fuels and aviation decarbonisation. |
| Indonesia | Biodiesel | Nationwide B40 biodiesel programme with discussions on progressing towards B50. | Among the worlds largest biodiesel blending programmes; expected to contribute significantly to global demand growth. | Reduced diesel imports and energy selfsufficiency. |
| India | Ethanol | Nationwide E20 rollout, expansion of CBG and a phased SAF blending roadmap. | Ethanol production capacity exceeds 1,995 crore litres per annum; (1002 crore litres produced from grains and 992 ccrore litres produced from sugar derivative) expected to be one of the fastest- growing biofuel markets globally. | Energy security, import substitution, farmer prosperity and rural value creation. |
Global policy momentum continues to reinforce biofuels as a critical pillar of the energy transition. Leading economies are strengthening blending mandates, introducing supportive regulatory frameworks and investing in advanced biofuels to improve energy security, reduce greenhouse gas emissions and enhance industrial competitiveness. Beyond climate objectives, these initiatives are also supporting rural livelihoods, domestic manufacturing and supply chain resilience. As countries diversify their energy mix and accelerate the decarbonisation of road transport, aviation and heavy industries, biofuels are expected to play an increasingly significant role in shaping the future of sustainable energy systems and creating long-term opportunities across the global bioeconomy.
Key Growth Drivers
| Growth Driver | Industry Impact |
| Energy Security | Countries are reducing dependence on imported crude oil through domestic biofuel production. |
| Net-Zero Commitments | Stronger blending mandates and low-carbon fuel standards are accelerating adoption. |
| Feedstock Diversification | Expansion beyond conventional feedstocks is improving sustainability and supply resilience. |
| Sustainable Aviation Fuel (SAF) | Emerging as the fastest-growing segment to support aviation decarbonisation. |
| W Technology & Innovation | Advancements in conversion technologies are improving efficiency and commercial viability. |
The global biofuels industry is entering a new phase of structural growth, driven by the convergence of energy security, climate commitments and industrial policy. According to the International Energy Agencys (IEA) Renewables 2025 report, renewable energy consumption in the transport sector is expected to increase by 50% by 2030, with liquid biofuels accounting for approximately 35% of this growth. The IEA has also revised its global biofuel demand forecast upwards by 50% compared with previous projections, reflecting stronger policy support, expanding blending mandates and rising transport fuel demand across major markets, including Brazil, Indonesia, India, Europe and the United States. Biofuel demand in India alone is expected to increase by around 80% by 2030, making it one of the fastest-growing biofuel markets globally.
Technology and innovation continue to expand the industrys long-term growth potential.
Advanced conversion technologies, greater feedstockdiversification and the commercialisation of second-generation biofuels and Sustainable Aviation Fuel (SAF) are improving both environmental performance and economic viability. The IEA projects that global SAF consumption will increase from approximately 1 billion litres in 2024 to around 9 billion litres by 2030, supported by aviation blending mandates and incentive mechanisms across major economies. Simultaneously, the IEAs World Energy Investment 2026 estimates that global energy investment will reach a record US$3.4 trillion in 2026, with approximately US$2.2 trillion directed towards clean energy technologies, almost double the investment in fossil fuels. These trends reinforce the growing role of biofuels within an increasingly diversified low-carbon energy system and highlight the sectors strategic importance in strengthening energy security, decarbonising transport and fostering sustainable economic growth.
Indian Biofuels Sector Review
Indias Emergence as a Global Bioenergy Leader
The global energy system is undergoing a structural transformation. Rising geopolitical uncertainty, supply chain disruptions, volatile crude oil prices and increasingly ambitious climate commitments have fundamentally reshaped national energy priorities. Around the world, governments are accelerating investments in domestically produced renewable fuels that can simultaneously strengthen energy security, reduce import dependence and support decarbonisation. In this evolving landscape, biofuels have transitioned from being an alternative transport fuel to becoming a strategic component of national energy policy.
Against this backdrop, India has emerged as one of the worlds most promising bioenergy markets. As the worlds third-largest energy consumer and one of the largest importers of crude oil, Indias economic resilience is closely linked to the availability and affordability of energy. Biofuels therefore serve a dual purpose-supporting climate objectives while strengthening domestic energy security through locally produced renewable fuels. This strategic alignment has elevated bioenergy from a sectoral initiative to a key pillar of Indias broader energy transition strategy.
Unlike many mature markets where biofuel deployment is primarily driven by emissions reduction mandates, Indias approach integrates multiple national priorities, including rural development, agricultural diversification, waste valorisation, industrial growth and import substitution. This integrated policy framework has enabled rapid expansion across liquid and gaseous biofuels while creating new economic opportunities across the agricultural and manufacturing sectors.
Market Evolution
The International Energy Agency (IEA) identifies India as one of the fastest-growing bioenergy markets globally, supported by abundant agricultural residues, organic waste resources and a strong policy framework.
Indias biofuel industry has witnessed rapid expansion over the past decade, supported by a coordinated policy framework spanning demand creation, production incentives, feedstock diversification and infrastructure development. Since the introduction of the National Policy on Biofuels in 2018, the country has significantly expanded the production and consumption of renewable transport fuels, positioning itself among the leading biofuel markets globally.
According to the IEA, India became the worlds fourth-largest consumer of liquid biofuels in 2024.
Demand growth has been driven primarily by ethanol blending, supported by guaranteed procurement mechanisms, remunerative pricing, feedstock flexibility and long-term offtake agreements with Oil Marketing Companies (OMCs). Liquid biofuel demand has increased fourfold since 2018, while production capacity has expanded nearly sevenfold over the same period.
The evolution of Indias biofuel sector extends beyond conventional ethanol. The industry is progressively diversifying into compressed biogas (CBG), biodiesel, Sustainable Aviation Fuel (SAF) and advanced biofuels, reflecting a broader shift towards developing an integrated bioeconomy capable of addressing multiple transport and industrial applications.
Policy and Institutional Support
One of Indias greatest competitive strengths lies in the consistency and breadth of its policy framework. Rather than relying on a single incentive mechanism, the sector has benefited from complementary policies covering feedstock availability, demand assurance, financing, taxation, technology development and infrastructure creation.
The National Policy on Biofuels established long-term blending targets while progressively expanding eligible feedstocks beyond sugarcane to include maize, damaged food grains, surplus grains and agricultural residues. The Ethanol Blended Petrol Programme introduced assured procurement and pricing mechanisms, while dedicated interest subvention schemes accelerated investments in new distillation capacity. More recently, policy support has expanded towards Sustainable Aviation Fuel, multifeedstock biorefineries and second-generation biofuels, reinforcing Indias long-term commitment to diversified renewable fuels.
The IEA notes that Indias coordinated approach combining demand-side mandates with supply-side incentives has been instrumental in attracting private investment and rapidly scaling domestic production capacity.
Feedstock Advantage
India possesses one of the worlds most diverse and abundant bioenergy resource bases. Large volumes of sugarcane, maize, agricultural residues, damaged food grains, organic waste and used cooking oil provide multiple pathways for renewable fuel production. This diversified feedstock ecosystem enhances supply resilience while reducing dependence on individual agricultural commodities.
The report highlights that demand for feedstocks has increased steadily alongside expanding biofuel production. By 2024, India utilised more than 25 million metric tonnes of feedstocks for liquid biofuel production, with sugars accounting for over 60% of total demand and starch-based feedstocks contributing more than one-third. As biofuel technologies mature, feedstock diversification is expected to become increasingly important in supporting future growth across biodiesel, CBG and Sustainable Aviation Fuel.
Expanding Beyond Ethanol
While ethanol remains the cornerstone of Indias renewable fuel programme, the next phase of growth is expected to be driven by the expansion of gaseous and advanced biofuels.
The IEA identifies compressed biogas as one of Indias largest emerging opportunities, supported by abundant biomass resources, expanding policy support and increasing investment interest. Approximately 170 CBG plants are operational, with nearly 300 additional projects under development. At the same time, Indias Sustainable Aviation Fuel programme is gaining momentum, supported by announced blending targets and growing demand from the aviation sector. Together, these segments are expected to diversify Indias renewable fuel portfolio while opening new avenues for investment and industrial development.
Indian Clean Fuels Market
i) Indian Ethanol Market (1G & 2G)
Policy support for ethanol in India gained momentum in 2014 with the introduction of a revised ethanol pricing mechanism which provided stable and fixed prices for ethanol produced from sugar cane to improve cost-competitiveness and support scaling up of production. Building on this policy, India launched its National Policy for Biofuels (NPB) in 2018 to expand its domestic liquid biofuel industry and reduce reliance on crude oil imports for gasoline production. The NPB originally set a target of blending 20% ethanol in gasoline by 2030, which was later amended in 2022 to achieve this blending rate by 2025/26.
India developed several other policies in 2018 to support development of the ethanol supply chain and the targets set out under the NPB. These measures included financial support for new projects through the Scheme to Enhance Ethanol Distillation Capacity, which subsidises interest on loans used to retrofit existing facilities or develop new ethanol plants, as well as an expansion of eligible feedstocks to include heavy molasses, sugarcane juice and sugar, damaged food grains, maize and surplus rice. In addition, India reduced the tax rate on ethanol used for blending from 18% to 5% to improve the cost-competitiveness.
In 2019, India launched the EBP Programme, originally a pilot and demonstration programme from 2001, to provide additional financial incentives to support mandated ethanol blending targets under the NPB while supporting feedstock suppliers. Under this programme, the government sets remunerative pricing for ethanol produced from feedstock based on sugar cane to support cost competitiveness for ethanol producers. The OMCs provide long-term demand for ethanol by entering offtake agreements, of up to 10 years, with project developers and lenders.
India developed the Pradhan Mantri JI-VAN Yohana programme in the same year, later amended in 2024, to increase production of ethanol from a greater diversity of feedstocks. The programme provides USD 230 million (1 969.50 crore Indian rupees (INR)) of funding for the expansion of existing, or development of new, integrated ethanol projects using lignocellulosic biomass, non-edible food crops and waste-based feedstock. The programme has set a target to develop 10 demonstration-scale and 12 commercial-scale projects by 2028/29. The programme has so far provided over USD 100 million (INR 908.25 crore) for six commercial and four demonstration plants.
India developed the Pradhan Mantri JI-VAN Yojana programme in the same year, later amended in 2024, to increase production of ethanol from a greater diversity of feedstocks. The programme provides USD 230 million (1 969.50 crore Indian rupees (INR)) of funding for the expansion of existing, or development of new, integrated ethanol projects using lignocellulosic biomass, non-edible food crops and waste-based feedstock. The programme has set a target to develop 10 demonstration-scale and 12 commercial-scale projects by 2028/29. The programme has so far provided over USD 100 million (INR 908.25 crore) for six commercial and four demonstration plants.
In 2021, India created the Roadmap for Ethanol Blending in India 2020-25. The roadmap outlines annual measures to increase domestic ethanol supply and demand, setting intermediate targets in line with the NPB and the EBP Programme. These included a phased-in blending target of 10% for ethanol in 2022, as well as phased-in blending of 20% for ethanol by 2025. It also sought to double domestic ethanol production capacity from 2020 to 2025, to 15 billion litres (1500 crore litres). The extension of the EBP directing OMCs to sell gasoline blended with 20% ethanol and the development of guidelines for signing longterm offtake agreements for ethanol for OMCs in 2021, complemented the roadmap and the NPB.
Several Indian states have also developed policies to support deployment of ethanol. In 2018, Haryana launched its Bioenergy Policy, which provides exemptions on stamp and electricity duties for ethanol producers. Similarly, in 2022, Uttar Pradesh launched its Bioenergy Policy, and in 2023, Bihar launched its Biofuel Promotion Policy, which both provide similar duty exemptions for ethanol production facilities. In 2024, Maharashtra introduced its Integrated Bioenergy Policy, again providing similar exemptions to duties, as well as capital subsidies ranging from 40% to 100% for new ethanol projects. In 2025, Madhya Pradesh launched its Biofuels Scheme, providing similar duty exemptions as the other states as well as a 40% capital subsidy up to USD 22.2 million (INR 200 crore) for new cellulosic-ethanol projects.
India has broadened support for ethanol development by providing financial support for the interest on loans used to retrofit existing, or develop new, ethanol production facilities under the Scheme for Cooperative Sugar Mills. Similarly to the Scheme to Enhance Ethanol Distillation Capacity implemented in 2018, it provides financial support for converting ethanol production facilities using sugar cane to ones that can use a range of feedstocks such as maize and damaged rice.
India has significantly expanded its ethanol production capacity in line with its long-term energy security and biofuels objectives. As of 2025-26, the countrys installed ethanol production capacity has reached approximately 1,995 crore litres per annum, of which around 1,002 crore litres is grain-based, with the remaining capacity comprising molasses-based and dual-feed distilleries. This rapid capacity expansion has diversified Indias feedstock base, enhanced operational flexibility, improved year-round capacity utilisation, and strengthened the resilience of the domestic ethanol value chain.
| Ethanol Supply Year | Average Ethanol Blending Achieved |
| 2020-21 | -8.1% |
| 2021-22 | 10.0% |
| 2022-23 | 12.1% |
| 2023-24 | 14.6% |
| 2024-25 | 19.2% |
| 2025-26*(Nov-Jun) | 20.0% |
The sustained policy support and investments over the past decade have fostered a robust and integrated biofuels ecosystem spanning feedstock cultivation, processing infrastructure, logistics, and assured market offtake. Beyond enabling the achievement of the E20 ethanol blending target, this ecosystem provides a strong platform for the development of advanced biofuels and bio-based products. With abundant agricultural biomass, expanding multi-feedstock processing capabilities, and a supportive policy framework, India is well positioned to emerge as a globally competitive producer of advanced biofuels, particularly Sustainable Aviation Fuel (SAF), supporting both domestic decarbonisation objectives and international market opportunities. The recent decision to permit exports of cellulosic ethanol further underscores Indias intent to strengthen its position as a global supplier of sustainable fuels while continuing to expand domestic production capacity.
India is also laying the foundation for the next generation of biofuels through the development of second-generation (2G) ethanol . The country is estimated to have an annual surplus availability of 12-16 crore tonnes of lignocellulosic biomass , including agricultural residues, which has the potential to produce 2,500-3,000 crore litres of ethanol annually . Harnessing this abundant resource presents a significant opportunity to strengthen Indias energy security, reduce crude oil imports, and unlock substantial value from agricultural waste.
Beyond ethanol production, 2G biorefineries enable the creation of a diversified portfolio of renewable products, including biogas, renewable CO 2 , bio-based chemicals, pellets, compost, and other high-value co-products such as furfural and xylitol, enhancing overall project economics. These integrated biorefineries also contribute to rural economic development by creating additional income streams for farmers, generating employment, and promoting sustainable agricultural practices through improved residue management and reduced dependence on chemical fertilisers.
The strategic significance of 2G ethanol extends beyond road transportation. As a sustainable feedstock for Sustainable Aviation Fuel (SAF), biochemicals, bioplastics, and other bio-based materials, it is expected to play a pivotal role in the decarbonisation of hard-to-abate sectors while supporting the growth of Indias broader bioeconomy. Recognising this potential, the Government of India continues to accelerate commercial deployment through targeted initiatives such as the Pradhan Mantri JI-VAN Yojana, reinforcing the countrys transition towards an integrated, circular and globally competitive bio-based economy.
India is now entering the next phase of its biofuels journey through the accelerated development of second-generation (2G) ethanol, which is expected to play a transformative role in the countrys long-term energy transition. With an estimated 12-16 crore tonnes of surplus lignocellulosic biomass generated annually, India possesses one of the worlds largest sustainable feedstock bases for advanced biofuels. This resource has the potential to produce 2,500-3,000 crore litres of ethanol annually, significantly enhancing domestic energy security while creating value from agricultural residues that would otherwise remain underutilised.
Unlike conventional ethanol production, 2G biorefineries represent integrated bio-manufacturing platforms capable of producing a wide range of renewable fuels, bio-based chemicals and high-value co-products, improving both resource efficiency and project economics. Their development is expected to strengthen rural value chains by generating additional farmer income, creating skilled employment, promoting scientific crop residue management, and fostering a circular bioeconomy.
Beyond supporting Indias long-term ethanol blending ambitions, 2G ethanol is also a strategic feedstock for Sustainable Aviation Fuel (SAF), renewable chemicals and other advanced bio-based products, enabling decarbonisation across hard-to-abate sectors. Backed by initiatives such as the Pradhan Mantri JI-VAN Yojana, continued policy support and increasing private sector investment, India is building the foundations of a globally competitive advanced biofuels ecosystem. This positions the country not only as a leader in ethanol blending but also as a future hub for low-carbon fuels and bio-based manufacturing serving both domestic and international markets.
ii) Indian Sustainable Aviation Fuel (SAF) Market
India is emerging as a key participant in the global Sustainable Aviation Fuel (SAF) ecosystem, supported by its abundant agricultural resources, rapidly expanding biofuels industry and progressive policy framework. As one of the worlds fastest-growing aviation markets, India recognises SAF as a strategic solution to decarbonise aviation, enhance energy security, reduce dependence on imported fossil fuels and create new value streams for the agricultural economy.
The aviation sector remains one of the most challenging industries to decarbonise due to the high energy-density requirements of long-haul flights, the long operational life of commercial aircraft and the absence of commercially viable alternatives to liquid hydrocarbon fuels. Consequently, SAF has emerged as the most practical and scalable decarbonisation pathway for aviation. Unlike hydrogen or electric propulsion technologies, SAF is a drop-in fuel, enabling its use in existing aircraft engines, airport infrastructure and fuel distribution systems without requiring modifications. This allows immediate emissions reductions across the current global fleet while next-generation propulsion technologies continue to mature.
Recognising its strategic importance, India has announced a phased blending roadmap for international flights, mandating 1% SAF blending from 2027, 2% in 2028 and 5% by 2030. These targets are expected to stimulate domestic production capacity, create long-term demand certainty and accelerate investments across the SAF value chain.
| SAF Blending Target | Implementation Year | Estimated SAF Requirement |
| 1% | 2027 | 14 crore litres |
| 2% | 2028 | 28 crore litres |
| 5% | 2030 | 70 crore litres |
Indias successful ethanol blending programme has created one of the worlds most robust and integrated biofuels ecosystems, providing a strong foundation for commercial-scale SAF production. Over the past decade, sustained policy support, significant investments and coordinated industry participation have resulted in diversified feedstock availability, nearly 2,000 crore litres per annum of installed ethanol production capacity, multi-feedstock processing capabilities, established logistics infrastructure, assured offtake
mechanisms through Oil Marketing Companies and a mature regulatory framework. This integrated ecosystem substantially lowers the barriers to scaling advanced biofuels by leveraging existing infrastructure, supply chains, technical expertise and investment confidence.
India is particularly well positioned to commercialise the Alcohol-to-Jet (ATJ) pathway, which is expected to play a pivotal role in the future SAF market. Under the internationally recognised ASTM D7566 specification, Alcohol-to-Jet Synthetic Paraffinic Kerosene (ATJ-SPK) produced from ethanol and isobutanol is approved for blending with conventional Aviation Turbine Fuel (ATF) at up to 50% , enabling deployment through existing aircraft engines and airport fuel infrastructure without requiring modifications. As one of the worlds largest ethanol producers with an integrated multi-feedstock ecosystem, India possesses a distinct competitive advantage in scaling ATJ-based SAF production. Leveraging its established ethanol infrastructure, abundant agricultural feedstocks and expanding second-generation ethanol capacity, India has the opportunity to transition from conventional biofuels to high-value renewable aviation fuels while strengthening its position in the global SAF value chain.
Beyond ATJ, India possesses one of the worlds largest sustainable biomass resources, including sugarcane, grain, agricultural residues and lignocellulosic biomass, creating multiple pathways for SAF production. While current global commercial production is primarily based on Hydroprocessed Esters and Fatty Acids (HEFA) using waste oils and fats, the industry is progressively expanding towards advanced feedstocks including lignocellulosic biomass, municipal solid waste, renewable hydrogen and captured carbon dioxide (e-SAF). This diversified feedstock availability, combined with Indias rapidly growing renewable energy sector, provides a strong platform for developing an integrated advanced biofuels ecosystem capable of serving both domestic and export markets.
Globally, SAF is expected to become the principal driver of aviation decarbonisation. According to the IATA Fly Net Zero roadmap, SAF is projected to contribute approximately 65% of cumulative aviation CO 2 emission reductions by 2050 , substantially exceeding the contribution from new aircraft technologies, operational improvements, carbon capture and offsets combined. Achieving these ambitions will require an unprecedented scale-up in sustainable feedstock supply chains, biorefinery capacity and advanced fuel technologies, presenting a significant long-term investment opportunity.
Despite its significant long-term potential, SAF currently faces commercial challenges, with production costs estimated to be two to five times higher than conventional aviation turbine fuel, depending on the production pathway and feedstock. Bridging this cost differential will require sustained policy support, technological innovation and stable market mechanisms. International experience demonstrates that the most successful SAF ecosystems combine blending mandates, production incentives and carbon pricing mechanisms, creating long-term demand certainty while improving project bankability and accelerating commercial deployment.
India is well positioned to build upon the success of its ethanol blending programme by adopting similar policy mechanisms for SAF. Expanding initiatives such as the Pradhan Mantri JI-VAN Yojana, extending concessional financing and capital support for commercial-scale SAF projects, facilitating long-term offtake agreements, and encouraging innovation-led funding programmes can significantly accelerate domestic SAF production. Continued international collaboration through platforms such as the Global Biofuels Alliance, together with bilateral partnerships focused on technology development, sustainability standards and commercial deployment, will further strengthen Indias competitiveness in the global SAF market.
With abundant and diversified feedstock resources, a mature ethanol ecosystem, expanding renewable energy capacity, progressive policy support and one of the worlds fastest-growing aviation markets, India possesses the essential building blocks to emerge as a global leader in Sustainable Aviation Fuel. The countrys unique combination of feedstock availability, world-scale ethanol infrastructure and favourable ATJ economics positions it to become a competitive producer and exporter of SAF, supporting domestic aviation decarbonisation while creating new opportunities in advanced bio-manufacturing, rural development, energy security and the global low-carbon economy.
Compressed Biogas (CBG) is emerging as an important pillar of Indias clean energy transition, combining the objectives of energy security, waste management, rural development and industrial decarbonisation. Produced by purifying and upgrading biogas generated from agricultural residues, animal manure, municipal solid waste, industrial effluents and other organic feedstocks, CBG can meet natural gas quality standards and serve as a renewable, drop-in substitute for fossil-based natural gas.
CBG has the advantage of being compatible with existing gas infrastructure and end-use applications. It can be supplied through City Gas Distribution networks, injected into gas pipelines and used across transportation, domestic PNG, commercial establishments and industrial facilities. Its development therefore allows India to expand renewable gas consumption while leveraging much of the infrastructure already created for conventional natural gas.
Policy support for the sector was initiated through the Government of Indias Sustainable Alternative Towards Affordable Transportation (SATAT) programme, which sought to establish a commercial market for CBG through procurement by Oil Marketing Companies. The sector has since been supported by the GOBARdhan initiative, waste-to-energy programmes, the CBG-CGD Synchronisation Scheme and measures facilitating the injection of CBG into gas pipeline networks.
A significant development has been the introduction of the CBG Blending Obligation , which creates a phased and predictable demand pathway for renewable gas in the CNG transport and domestic PNG segments of City Gas Distribution networks. The obligation begins at 1% in FY 2025-26 , rises to 3% in FY 2026-27 and 4% in FY 2027-28 , and reaches 5% from FY 2028-29 onwards. A Central Repository Body is expected to oversee implementation and compliance. The extension of the CBG-CGD Synchronisation Scheme until 31 December 2047 further strengthens long-term policy visibility and investment confidence across the value chain.
Despite being the worlds third-largest energy consumer, Indias per capita natural gas consumption remains approximately 50 cubic metres per annum, compared with a global average of around 400 cubic metres, highlighting the substantial long-term opportunity for growth in gaseous fuels.
The demand fundamentals for CBG are closely linked to the continued expansion of Indias natural gas economy. In FY 2024-25, City Gas Distribution accounted for approximately 21% of the countrys natural gas consumption , while city gas demand increased at an average annual rate of around 10% over the preceding three years . CNG constituted approximately 60% of city gas consumption and remained its fastest-growing segment, registering average annual growth of about 22% between FY 2021-22 and FY 2024-25 .
India currently has approximately 8,000 CNG stations , with a national ambition to expand the network to around 17,500 stations by 2030 . CNG passenger vehicles have also gained considerable market acceptance, with their share of vehicle sales increasing from approximately 6.3% in 2020 to 19.5% in 2025 . This expanding downstream network provides a strong platform for the progressive substitution of fossil CNG with domestically produced CBG.
Beyond mobility, significant demand potential exists across industry. Fertilisers accounted for approximately 29% of Indias natural gas consumption in FY 2024-25 , followed by refineries and petrochemicals. In addition, nearly one-third of city gas was consumed by industrial users. CBG can substitute fossil natural gas, coal and oil across thermal and non-energy applications, particularly in fertilisers, refining, petrochemicals, iron and steel, textiles and other energy-intensive industries.
This industrial opportunity is expected to strengthen as corporate decarbonisation commitments become more ambitious and Indias Carbon Credit Trading Scheme becomes operational. The use of certified renewable gas can enable industrial consumers to lower their emissions intensity while supporting compliance with emerging carbon reduction obligations. Over time, transparent certification, guarantees of origin and credible lifecycle-emissions accounting will be important for distinguishing CBG from fossil natural gas and recognising its environmental attributes.
India possesses a substantial and diversified feedstock base for scaling the CBG sector. Agricultural residues, cattle dung, press mud, spent wash, municipal organic waste, wastewater and other agro-industrial by-products offer significant production potential. The use of these resources can reduce open-field burning, improve municipal and agricultural waste management, prevent uncontrolled methane emissions and create additional income streams for farmers and rural communities.
The circular-economy benefits extend beyond renewable gas. CBG plants also produce bio-manure and fermented organic manure, which can support soil health, reduce dependence on chemical fertilisers and improve the overall economics of integrated biogas facilities. The sector therefore creates value across energy, agriculture, sanitation and environmental management rather than functioning solely as a fuel-production industry.
Indias CBG production has expanded meaningfully in recent years. Based on registered operating capacity and an assumed average plant capacity factor of approximately 35% , estimated production increased more than eightfold between 2020 and 2025. However, operating utilisation across plants continues to vary widely, generally ranging between 20% and 60% , compared with average utilisation levels above 80% in more mature European biomethane markets.
Improving plant utilisation will be central to the sectors next phase of development. As the market matures, greater emphasis will be required on tracking actual production and operational performance rather than installed capacity alone. Stronger feedstock planning, technology selection, preventive maintenance, process optimisation and assured offtake will be necessary to improve project reliability and financial performance.
Feedstock aggregation remains one of the sectors principal challenges. Much of Indias agricultural residue is dispersed across small and fragmented landholdings, making collection, transportation and storage complex. Feedstocks are seasonal, have competing applications and may be available for collection only during short harvesting windows. This creates logistical pressure and can affect the ability of plants to maintain a consistent year-round supply.
Farmer Producer Organisations, cooperatives and locally anchored aggregators can play an important role in addressing these constraints.
By consolidating supply, diversifying feedstock sources and developing structured procurement arrangements, these institutions can improve project bankability and reduce supply-chain risks. Government support for crop-residue collection machinery has also helped improve access to biomass, although transportation, storage and densification costs remain significant.
Municipal solid waste presents a separate set of challenges, particularly inadequate segregation at source. The presence of plastics, inert materials and hazardous contaminants can reduce biogas yields, damage equipment and increase pretreatment costs. Scaling waste-based CBG will therefore require stronger urban waste segregation systems, predictable concession frameworks and closer coordination between producers and local authorities.
Cost competitiveness remains another important consideration. The levelised production cost of CBG is generally higher than the delivered price of conventional natural gas, while many of its environmental and social benefits are not yet fully reflected in market prices. Feedstock costs, land acquisition, logistics, financing and low plant utilisation can materially influence project economics.
The commercial case improves considerably when plants are developed close to dense and diversified feedstock sources, gas grids or assured local offtake. Multi-feedstock facilities can provide greater feedstock security and potentially improve yields, although they may require additional processing and logistics capabilities. Recognising environmental co-benefits, creating long-term demand visibility and appropriately valuing organic fertiliser and waste-treatment services can further improve project viability.
The development of gas-market infrastructure will also shape the sectors growth. Open access to gas grids, mass-balance mechanisms and credible book-and-claim systems could enable producers to supply industrial consumers without requiring a direct physical connection between each plant and end user. Renewable gas purchase agreements, supported by reliable registries and safeguards against double counting, could create an additional corporate offtake market similar to renewable power purchase agreements.
The policy ecosystem is also evolving beyond demand creation towards strengthening the commercial viability of the CBG sector. Eligible projects under the SATAT and Ministry of New and Renewable Energy (MNRE) framework can avail Central Financial Assistance (CFA) of up to Rs.4 crore for every 4.8 TPD of CBG production capacity, subject to a maximum assistance of Rs.10 crore per plant, covering approximately 20-30% of the project cost. Complementing this, the Government has approved a Capital Outlay Package comprising the Biomass Aggregation Machinery (BAM) Scheme to strengthen feedstock collection and aggregation, and the Development of Pipeline Infrastructure (DPI) Scheme to facilitate CBG injection into City Gas Distribution (CGD) networks.
In parallel, the proposed Sampoorn GOBARdhan Scheme aims to establish a comprehensive framework for the sector through assured CBG offtake, enhanced administered procurement prices, additional capital support for new projects, improved feedstock aggregation and logistics, and stronger market certainty. The proposed programme aims to increase the number of operational CBG plants from around 200 currently to approximately 700 over the next few years, while supporting Indias longer-term ambition of establishing 5,000 CBG plants with an annual production capacity of 15 million metric tonnes by 2030. Together with the CBG Blending Obligation and the extension of the CBG-CGD Synchronisation Scheme, these measures are expected to significantly improve project bankability, accelerate private investment and strengthen the long-term growth prospects of Indias CBG ecosystem.
Together with the CBG Blending Obligation and the extension of the CBG-CGD Synchronisation Scheme, these measures are expected to strengthen project bankability, improve value-chain efficiency, accelerate private investment and support the rapid expansion of Indias CBG ecosystem.
The sectors long-term potential has also attracted growing international collaboration. At the 16th India-Japan Annual Summit in July 2026, the two countries launched the India-Japan Cooperative Biogas for Growth Initiative, aimed at advancing cooperation towards Indias goal of establishing 1,000 biogas and organic fertiliser plants. The initiative reflects increasing international recognition of Indias renewable gas opportunity and is expected to support cooperation in technology, investment and ecosystem development. The official summit outcomes also highlighted cooperation towards building demand for vehicles powered by biogas.
Looking ahead, CBG is expected to become an increasingly important component of Indias diversified energy system. The combination of a phased blending obligation, expanding City Gas Distribution infrastructure, strong transport demand, industrial decarbonisation requirements and growing international collaboration provides a credible long-term demand base.
The sectors next phase will depend on moving from capacity creation to consistently high-performing assets. Stronger feedstock supply chains, better utilisation, transparent certification, grid access, long-term offtake and mechanisms that recognise CBGs environmental value will be essential. With these enablers in place, CBG can make a meaningful contribution to reducing natural gas imports, strengthening rural economies, improving waste management and advancing Indias transition towards a more secure, circular and low-carbon energy system.
iv) Indian Green Hydrogen Market
Green hydrogen is emerging as a cornerstone of the global clean energy transition, offering one of the most viable pathways to decarbonise hard-to-abate sectors such as refining, fertilisers, steel, chemicals, shipping and heavy mobility. As countries seek to simultaneously strengthen energy security, reduce carbon emissions and build resilient industrial value chains, green hydrogen is increasingly being recognised as a strategic energy vector that extends well beyond the power sector.
Recognising its transformative potential, the Government of India launched the National Green Hydrogen Mission (NGHM) with the objective of positioning India as a global hub for the production, utilisation and export of green hydrogen and its derivatives. The Mission targets 5 million metric tonnes (MMT) of annual green hydrogen production by 2030 , supported by approximately 125 GW of dedicated renewable energy capacity . It is expected to attract investments exceeding Rs.8 lakh crore , create more than 6 lakh jobs , reduce fossil fuel imports by over Rs.1 lakh crore annually , and abate nearly 50 million metric tonnes of greenhouse gas emissions each year.
The Mission has now entered the implementation phase with significant progress across the value chain. Incentives have been awarded for 3,000 MW per annum of domestic electrolyser manufacturing capacity and 8.62 lakh metric tonnes per annum of green hydrogen production capacity. In addition, long-term demand aggregation has been undertaken for 7.24 lakh metric tonnes per annum of green ammonia for the fertiliser sector, while green hydrogen supply has been awarded for public sector refineries, demonstrating the Governments commitment to creating both production capacity and assured demand. Pilot projects have also been sanctioned across steel, mobility and maritime sectors, including the deployment of 37 hydrogen-powered vehicles supported by nine hydrogen refuelling stations across ten routes.
To further strengthen the ecosystem, India has introduced the Green Hydrogen Certification Scheme , established dedicated Green Hydrogen Hubs, expanded research and development funding, and introduced financial incentives under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme. These initiatives are expected to accelerate technology development, encourage domestic manufacturing and enhance Indias competitiveness in the global hydrogen economy.
Looking ahead, the National Green Hydrogen Mission is expected to play a catalytic role in building an integrated hydrogen value chain that extends well beyond hydrogen production. Achieving the Missions target of 5 MMT of annual green hydrogen production by 2030 will require approximately 125 GW of dedicated renewable energy capacity, creating substantial opportunities across renewable power generation, electrolyser manufacturing, engineering equipment, storage systems, transmission infrastructure, specialised transportation and downstream industries. Beyond its environmental benefits, the Mission is expected to stimulate large-scale industrial investment, strengthen domestic supply chains and create a globally competitive manufacturing ecosystem for hydrogen technologies and their derivatives.
India is simultaneously creating the enabling infrastructure required for large-scale commercialisation of green hydrogen. The development of dedicated Green Hydrogen Hubs, integrated production, storage and transportation facilities, port-based export infrastructure and supportive policy mechanisms is laying the foundation for a robust hydrogen economy. Together with pilot projects across refining, fertilisers, steel, mobility, shipping and power generation, collaborative research programmes involving leading academic and scientific institutions, and internationally aligned certification standards, these initiatives are expected to accelerate technology adoption, improve investor confidence and facilitate the development of a resilient hydrogen ecosystem spanning production, utilisation and exports.
Indias structural advantages further reinforce its long-term growth potential. As the worlds third-largest renewable energy market, with abundant solar and wind resources, a large industrial demand base, expanding port infrastructure and strong policy support, the country is well positioned to produce green hydrogen at globally competitive costs.
As production economics continue to improve and international demand for low-carbon fuels accelerates, India is expected to emerge as a leading producer and exporter of green hydrogen, green ammonia and green methanol, while strengthening energy security, enhancing industrial competitiveness and supporting sustainable economic growth.
Looking ahead, green hydrogen is expected to complement other renewable energy pathways, including biofuels, in building a diversified and resilient low-carbon energy system. While biofuels will continue to play a critical role in decarbonising transportation and leveraging Indias agricultural strengths, green hydrogen is expected to drive the decarbonisation of industrial processes and heavy transport. Together, these technologies are expected to form the foundation of Indias transition towards a secure, self-reliant and globally competitive clean energy economy.
The global market for green hydrogen is expected to expand rapidly over the coming decades as countries accelerate efforts to decarbonise hard-to-abate sectors. According to the International Energy Agency (IEA), global hydrogen demand, which currently exceeds 100 million tonnes per annum, is expected to grow significantly under announced policy scenarios, with low-emissions hydrogen playing an increasingly important role in refining, fertilisers, steel, chemicals, shipping and aviation. Simultaneously, the International Renewable Energy Agency (IRENA) projects that hydrogen and its derivatives could account for nearly 10-12% of global final energy consumption by 2050, creating a substantial long-term market for producers capable of supplying competitively priced low-carbon molecules. Indias expanding renewable energy capacity, favourable resource availability and supportive policy framework position the country to capitalise on this emerging global opportunity.
v) Indian Biodiesel Market
India has identified biodiesel as a strategic component of its long-term energy transition, complementing ethanol in reducing dependence on imported crude oil, enhancing energy security and supporting the decarbonisation of the transportation sector. While ethanol has emerged as the primary biofuel for gasoline substitution, biodiesel is expected to play an increasingly important role in reducing emissions from diesel-intensive sectors such as commercial transportation, agriculture, mining, railways, shipping and industrial applications, where electrification remains challenging.
Policy support for biodiesel gained significant momentum with the introduction of the National Policy on Biofuels, 2018 , which established an indicative target of achieving 5% biodiesel blending with diesel by 2030 . The policy expanded the range of eligible feedstocks beyond conventional vegetable oils to include used cooking oil (UCO) , n on-edible vegetable oils, acid oils, animal tallow, tree-borne oils and other waste-derived feedstocks , promoting resource efficiency, waste valorisation and a circular economy while reducing reliance on imported fossil fuels.
To strengthen feedstock availability, the Food Safety and Standards Authority of India (FSSAI) launched the Repurpose Used Cooking Oil (RUCO) initiative in 2018. The programme aims to channel u sed cooking oil generated by households, restaurants, hotels and the food processing industry towards biodiesel production through an organised collection and aggregation ecosystem. Besides improving food safety by preventing the reuse of degraded cooking oil, the initiative has created a sustainable domestic feedstock base for biodiesel production.
Demand creation has been supported through procurement by Indias Oil Marketing Companies (OMCs), which periodically issue biodiesel procurement tenders under administered pricing mechanisms, providing long-term demand visibility for producers. In 2019, the Government further liberalised the sector by permitting private biodiesel manufacturers to market B100 biodiesel directly to bulk consumers , subject to prescribed fuel quality standards. This expanded market access beyond OMC procurement and encouraged greater participation by private producers, commercial fleets, industrial users and captive consumers.
Several states have complemented the national policy framework through dedicated fiscal and capital incentives. Uttar Pradesh introduced production-linked incentives under its Bioenergy Policy to encourage investment in biodiesel manufacturing. Maharashtras Integrated Bioenergy Policy provides significant capital assistance for biodiesel production facilities through investment-linked incentives for plant and machinery, while Madhya Pradeshs Biofuels Scheme extends capital subsidies for establishing new biodiesel manufacturing projects. These policy interventions are aimed at accelerating private investment, strengthening regional feedstock supply chains and creating distributed biodiesel production capacity across the country.
India has set an indicative target of achieving 5% biodiesel blending by 2030 . Current biodiesel blending levels are estimated to be in the range of approximately 0.57%-0.73% , reflecting the sectors early stage of development and the ongoing need to strengthen feedstock aggregation, organised collection infrastructure and production economics. Nevertheless, the significant gap between the current blending level and the national target represents a substantial long-term growth opportunity. Continued expansion of the UCO ecosystem, increasing availability of non-edible feedstocks, enhanced OMC procurement and growing private sector participation are expected to accelerate biodiesel deployment over the coming decade.
Beyond conventional biodiesel, India is also exploring advanced renewable fuels such as renewable diesel (HVO) and isobutanol, which offer enhanced fuel properties and wider applications across the transport and chemical sectors. Isobutanol, in particular, is gaining attention as a next-generation biofuel owing to its higher energy density, lower water affinity and superior blending characteristics compared with conventional ethanol. It also serves as a valuable platform chemical for the production of sustainable aviation fuel (SAF), renewable solvents, coatings, plastics and specialty chemicals. As technology matures and commercial deployment accelerates, these advanced fuels are expected to complement Indias existing biofuels programme and expand the countrys renewable fuels portfolio.
The long-term outlook for the sector remains favourable as India advances its broader energy transition and circular economy agenda. Growing urbanisation, rising generation of waste-based feedstocks, strengthening collection networks and increasing investments across the biodiesel value chain are expected to improve feedstock security and production efficiency.
Business Environment Outlook
India has emerged as one of the worlds most compelling biofuels growth stories, driven by a combination of visionary policymaking, abundant renewable resources, expanding industrial capabilities and strong public-private collaboration. Over the past decade, the countrys biofuels sector has evolved from a programme focused primarily on fuel blending into a comprehensive renewable fuels ecosystem that is increasingly central to Indias energy security, economic resilience, climate ambitions and industrial competitiveness.
For India, biofuels represent far more than an alternative source of energy. They are a strategic national priority that addresses multiple objectives simultaneously reducing dependence on imported crude oil, improving the countrys trade balance, enhancing farmer incomes, promoting rural industrialisation, strengthening circular economy practices and accelerating the transition towards a low-carbon economy. This multi-dimensional value proposition has positioned biofuels at the heart of Indias long-term development agenda, supporting the vision of Viksit Bharat 2047, Atmanirbhar Bharat and the commitment to achieve Net Zero emissions by 2070 .
Recognising these strategic advantages, the Government has established one of the worlds most progressive policy frameworks for biofuels. The National Policy on Biofuels, the Ethanol Blended Petrol (EBP) Programme, feedstock diversification initiatives, capacity expansion schemes, viability gap funding, assured procurement mechanisms and long-term pricing frameworks have collectively created a stable and investment-friendly ecosystem that has encouraged substantial private sector participation across the value chain.
These policy interventions have translated into measurable outcomes. During Ethanol Supply Year (ESY) 2025-26 , India successfully achieved 20% ethanol blending (E20) , five years ahead of the original target. Over the past decade, ethanol procurement by Oil Marketing Companies has increased from approximately 38 crore litres to more than 1,200 crore litres , while installed ethanol production capacity has expanded to nearly 2,000 crore litres per annum through a combination of grain-based, sugar-based and dual-feed distilleries. This remarkable transformation has generated significant foreign exchange savings, reduced crude oil imports, strengthened domestic energy security and created sustainable income opportunities for millions of farmers.
Perhaps more importantly, India has built one of the worlds most integrated biofuels ecosystems. The sector today extends well beyond conventional ethanol production and encompasses feedstock cultivation, biomass aggregation, logistics, processing infrastructure, technology development, fuel distribution and long-term offtake mechanisms. The transition towards multi-feedstock processing has significantly improved operational flexibility, enabling producers to optimise feedstock utilisation based on seasonal availability and market dynamics while strengthening supply chain resilience.
India also enjoys one of the worlds strongest structural advantages for future biofuels growth its abundant and diversified feedstock base. The country generates nearly 750 million metric tonnes of biomass annually , of which an estimated 228 million metric tonnes is available as surplus biomass for energy applications. This includes agricultural residues, crop waste, sugarcane by-products, grain residues, municipal solid waste and other renewable feedstocks that provide the foundation for scaling second-generation ethanol, compressed biogas (CBG), Sustainable Aviation Fuel (SAF), renewable chemicals and other advanced bio-based products . The productive utilisation of these resources not only reduces environmental impacts such as crop residue burning but also creates additional income streams for farmers while strengthening Indias circular economy.
The sector is now entering a new phase of evolution. Having successfully established a robust first-generation ethanol ecosystem, policy and industry attention is increasingly shifting towards advanced biofuels. The Government has introduced the Compressed Biogas Blending Obligation (CBGO) , announced a phased roadmap for Sustainable Aviation Fuel (SAF), expanded support under the Pradhan Mantri JI-VAN Yojana for second-generation biofuels, and continues to encourage investments in advanced biorefineries capable of producing multiple renewable products from a single feedstock. These initiatives reflect a broader transition from conventional biofuel production towards an integrated bioeconomy.
Indias leadership is also extending beyond domestic market development. Through the Global Biofuels Alliance, launched during Indias G20 Presidency, the country has assumed a leading role in shaping international collaboration on sustainable fuels. The Alliance seeks to harmonise sustainability standards, facilitate technology transfer, mobilise investments and promote global adoption of biofuels, reinforcing Indias position as both a major producer and an influential architect of the global renewable fuels ecosystem.
Looking ahead, Indias biofuels sector is expected to evolve from a domestic blending programme into a globally competitive renewable fuels industry. The convergence of abundant feedstock resources, policy stability, technological innovation, expanding infrastructure, increasing private investment and favourable global demand creates a compelling platform for long-term growth. As the world accelerates its transition towards low-carbon energy systems, India is uniquely positioned not only to meet its domestic energy security and decarbonisation objectives but also to emerge as a leading global hub for ethanol, Sustainable Aviation Fuel, compressed biogas, renewable chemicals and next-generation bio-based manufacturing.
The Indian biofuels sector today represents one of the countrys most significant structural growth opportunities. It combines strong policy support with demonstrated execution, world-scale feedstock availability, expanding industrial capability and increasing global relevance. For industry participants and investors alike, it offers a unique opportunity to participate in one of the defining transformations of the global energy landscape while contributing to Indias emergence as a resilient, self-reliant and sustainable energy economy.
Sector Outlook
The global energy transition is entering a new phase where energy security, industrial competitiveness and decarbonisation are increasingly being pursued in parallel rather than in isolation. In this evolving landscape, biofuels are expected to play a central role in enabling countries to reduce fossil fuel dependence while supporting economic growth, supply chain resilience and climate commitments. Unlike many emerging energy technologies that require extensive infrastructure transformation, biofuels offer an immediately deployable and scalable pathway to decarbonisation by leveraging existing production, distribution and end-use infrastructure.
India is exceptionally well positioned to capitalise on this structural shift. Having successfully established one of the worlds largest and most integrated ethanol ecosystems, the countrys renewable fuels industry is now transitioning from conventional fuel blending towards a broader bioeconomy encompassing advanced biofuels, renewable chemicals, bio-based materials and sustainable industrial products. This transition reflects a strategic evolution from import substitution to value creation, positioning biofuels not merely as transportation fuels but as an essential pillar of Indias future industrial and energy architecture.
The successful achievement of the E20 blending milestone marks the beginning of this next phase. Recent regulatory developments including the nationwide rollout of E20 fuel, the introduction of higher ethanol fuel specifications (E22, E25, E27 and E30), the certification of vehicles capable of operating on up to E100 ethanol, the regulatory framework enabling Sustainable Aviation Fuel (SAF) blending, and long-term policy support for Compressed Biogas (CBG)-collectively demonstrate the Governments commitment to building a comprehensive and future-ready renewable fuels ecosystem. These measures are expected to strengthen investment confidence, improve asset utilisation, encourage technological innovation and create long-term demand across multiple renewable fuel segments.
Looking ahead, the next wave of growth is expected to be driven by advanced biofuels, particularly second-generation ethanol, Sustainable Aviation Fuel (SAF), compressed biogas, renewable diesel and bio-based chemicals. Indias abundant agricultural resources, diversified biomass availability, integrated ethanol infrastructure and expanding renewable energy capacity provide a unique competitive advantage for commercialising these technologies at scale. The countrys robust first-generation ethanol ecosystem also creates a natural platform for Alcohol-to-Jet (ATJ) technology, positioning India favourably to participate in the rapidly expanding global SAF market.
The biofuels sector is also expected to play an increasingly important role in strengthening Indias manufacturing competitiveness. As industries worldwide seek sustainable alternatives to fossil-derived carbon, biomass is emerging as a critical feedstock for the production of renewable fuels, green chemicals, sustainable polymers, bio-based solvents and other high-value products. This evolution significantly expands the addressable market beyond transportation fuels and reinforces the strategic importance of integrated biorefineries capable of producing multiple value-added products from a common renewable feedstock.
Indias growing leadership on the global stage further enhances this opportunity. Through initiatives such as the Global Biofuels Alliance, the country is playing an increasingly influential role in shaping international standards, promoting technology collaboration and facilitating investment across the global renewable fuels ecosystem. As sustainability regulations become more stringent and global demand for low-carbon fuels continues to accelerate, India is well positioned to emerge not only as one of the worlds largest consumers of biofuels but also as a competitive producer and exporter of advanced renewable fuels and bio-based products.
The convergence of policy stability, abundant renewable resources, technological innovation, expanding infrastructure and increasing private sector participation creates a compelling long-term growth trajectory for the sector. More importantly, biofuels are increasingly being recognised as a strategic instrument of economic resilience, strengthening energy independence, reducing import dependence, enhancing rural prosperity and supporting industrial decarbonisation simultaneously.
The next decade is therefore expected to witness the emergence of biofuels as a foundational pillar of Indias clean energy economy. With one of the worlds strongest policy frameworks, an integrated renewable fuels ecosystem and unparalleled feedstock availability, India is uniquely positioned to lead the next phase of the global bioeconomy. For industry participants and investors alike, the sector represents not merely a growth opportunity, but a long-term structural transformation that will shape the future of sustainable energy, manufacturing and industrial development.
Key Government Policies
Policies for First Generation (1G) Ethanol & Biodiesel
National Biofuels Policy - The National Biofuels Policy 2018 aims to reduce Indias fossil fuel dependence, promote cleaner energy, and ensure energy security. It targets 20% ethanol blending with petrol by 2025 and 5% biodiesel blending with diesel by 2030. The policy encourages diverse feedstocks, prioritizing non-food sources.The 2022 amendment expanded feedstocks to include agricultural residues, forestry residues, and industrial wastes, and added advanced biofuels like 2G ethanol and compressed biogas (CBG). Financial incentives include subsidies, tax reductions, viability gap funding, and interest subvention, with additional incentives to attract private investment and favorable loan terms.
Ethanol Blended Petrol (EBP) Programme -The EBP programme was launched in 2003, aiming to promote the use of environmentally friendly alternative fuels and reduce import dependency for energy requirements. Under the EBP program, the government undertook several measures like re-introducing administered price mechanisms, exploring alternate routes to ethanol production and differential pricing mechanism for ethanol products. The government also introduced several schemes to reduce the price of ethanol blended petrol like reduction in GST on ethanol for EBP and interest subvention scheme. Furthermore, the government has released long term procurement targets for ethanol.
In 2019, the targets were revised to selling 10% ethanol blended petrol by 2022 and 20% by 2030; however, the government achieved its 2022 stated targets and has taken several measures to prepone the existing target of 20% blending in 2030 to 2025. In addition to these efforts, the Government is also using taxes and duties to encourage ethanol usage and boost the market for ethanol. For instance, an additional basic excise duty of Rs.2/ litre is being levied on unblended petrol (not blended with ethanol or methanol) intended for retail sale with effect from November 1, 2022, showcasing the Governments commitment towards bringing ethanol to the forefront.
To increase indigenous production of ethanol, the Government since 2014 took multiple interventions including administered price mechanism, opening alternate route for ethanol production, amendment to Industries (Development and Regulation) Act, 1951 which legislates exclusive control of denatured ethanol by the Central Government, reduction in GST from 18% to 5%, notification of National Policy on Biofuels - 2018, increasing scope of raw material for ethanol procurement, interest subvention scheme for enhancement and augmentation of ethanol production capacity and extension of EBP Programme to whole of India except islands of Andaman Nicobar & Lakshadweep with effect from April 1, 2019. (Source: CRISIL Report) It has been decided that the price of ethanol derived from damaged and surplus food grains has to be fixed by oil marketing companies (OMCs).
Interest cost subsidy for setting up ethanol plants -
Under the scheme for extending financial assistance to sugar mills for augmentation of ethanol production capacity, the Government of India extends soft loan to the mills for setting up new distilleries/ expansion and installation of incineration boilers or installation of any method as approved by central pollution control board for zero liquid discharge and interest cost subsidy on the loans to be extended by banks for five years including a one-year moratorium.
PLI Incentive - To increase the production of ethanol in the country and achieve the much-stated target of 20% blending by 2025, the Government has announced several schemes for the aligning industry, ultimately benefiting the ethanol production in the country. One of the incentives under the scheme is providing soft loans to sugar mills and a single-window mechanism for expedited regulatory clearance for building grain-based distilleries across the country.
Ethanol Interest Subvention Schemes have been introduced between 2018 and 2022, incentivizing entrepreneurs to establish new distilleries or expand existing ones. These schemes provide an interest subvention, which is borne by the Government of India of 6% or 50% of the interestcharged by banks/financial institutions for five years, whichever is lower, accompanied by a one-year moratorium.
Under the New Industrial Policy 2025, Government of Karnataka has introduced a scheme where certain industries receive an incentive of 1.75% of their gross revenue for actively participating in and supporting the states economy and job creation initiatives. (Source: CRISIL Report) Under the Government of Karnatakas scheme, if a company has a topline of Rs.1,000 crore in a financial year, it would receive incentives benefitting it to the tune of Rs.17.5 crore.
Special incentives package - The Government of Karnataka has granted a special incentives package for us effective from May 2023, concerning our ethanol production plants, which have collectively been recognized as a Super Mega Enterprise under the Industrial Policy 2020-2025. The incentives include a five-year exemption or reimbursement of all kinds of applicable stamp duty and registration charges, in addition to other incentives in line with the New Industrial Policy 2020-2025.
Exemption of excise duty The Central Board of Indirect Taxes and Customs (CBIC), in July 2022, exempted the excise duty on 12% ethanol blended petrol and 15% ethanol blended petrol in order to support the ethanol production in the country.
Ethanol projects under priority sector lending Some State Governments have also included ethanol projects under priority sector lending which has encouraged banks to sanction loans for ethanol projects.
Under the New Industrial Policy 2020-2025, the government has also introduced the Production Linked Incentive (PLI) scheme for automotive & auto component industry, specifically for flex fuel engine (capable of running ethanol 85 (E85) fuel) manufacturers, providing them with tax incentives. This move is expected to accelerate introduction of Flex Fuel vehicles in India, thus, growing the demand for ethanol in the country.
To further enhance the biofuel roadmap of India, Madhya Pradesh and Rajasthan governments have come up with specific ethanol policies, providing incentive packages & subsidies of around Rs 1.5 per litre of ethanol produced for a period of 7-10 years.
Price setting and subsidy for Potash Derived from Molasses (PDM), a potassium rich fertilizer derived from ash in molasses-based distilleries, is a by-product of the sugar-based ethanol industry. The potash-rich ash can be processed to produce PDM having 14.5% potash content and can be used by farmers in the field as an alternative to MOP (Muriate of Potash with 60% potash content). The Central Government has facilitated a mutually agreed price of PDM at Rs.4263/ MT for sale by sugar mills to fertilizer companies for the current year. In addition, PDM Manufacturers can also claim subsidy at Rs.345/ Ton at present rates under Nutrients Based Subsidy Scheme (NBS) of Department of Fertilizers. The idea behind these efforts of the government is to facilitate long-term sale/ purchase agreement on PDM between sugar mills and fertilizer companies.
Interest cost subsidy for setting up ethanol plants
Under the scheme for extending financial assistance to sugar mills for augmentation of ethanol production capacity, the government of India extends soft loan to the mills for setting up new distilleries/ expansion and installation of incineration boilers or installation of any method as approved by central pollution control board for zero liquid discharge. The government offers an interest subvention of 6% per annum or 50% of the rate of interest charged by banks, whichever is lower, for a period of five years.
Key Policies for Second (2G) Generation Ethanol
India is at the cusp of transforming to the 2nd Generation of Biofuel, due to recent government mandates and introduction of the policy Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana (PM JI-VAN Yojana) for funds providing an initial push to the 2G ethanol capacity in India and attract further investments in the sector. Under the scheme, financial support to twelve integrated 2G Bio-ethanol Projects with a total financial outlay of Rs.1,969.5 crore for the period 2018-19 to 2023-24 has been provided. The PM JI-VAN Yojana initiative has been introduced, which establishes a maximum financial aid of Rs.150 crore for commercial projects and Rs.15 crore for demonstration projects, and aims to enhance the economic viability of projects and foster research and development in the realm of 2G ethanol production technologies.
Apart from the financial assistance granted through the PM JI-VAN Yojana, various measures have been implemented to encourage the growth of ethanol plants. These include introducing extra excise duty on non-blended fuels, ensuring a guaranteed offtake for 15 years to private stakeholders through Ethanol Purchase Agreements signed by OMCs, diversifying the feedstock for 2G ethanol production, establishing a distinct price for 2G ethanol, reducing the GST rate to 5% on ethanol for the EBP Programme, and more. To accelerate innovation in the biofuels sector and attract greater investment, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved the modified Pradhan Mantri JI-VAN Yojana in August 2024.
The revised scheme extends its implementation timeline by five years, up to FY 2028-29, and broadens its scope to include advanced biofuels derived from lignocellulosic feedstocks such as agricultural and forestry residues, industrial waste, syngas, and algae. It also brings bolt-on units and brownfield projects under its ambit, allowing experienced players to enhance viability and scale operations. To encourage innovation and feedstock diversification, the scheme will now prioritize proposals featuring novel technologies and emerging solutions.
By enabling value creation from agri-residues, curbing pollution, fostering rural employment, and strengthening Indias energy independence, the modified JI-VAN Yojana aligns with the nations broader objectives of sustainability and self-reliance. It also advances Indias net-zero vision for 2070 and reinforces the Make in India mission by promoting indigenous biofuel technology development. This renewed push underlines the Government of Indias commitment to building a
Liquid Biofuel (Ethanol & Sustainable Aviation Fuel) Policies in India
| Policy / Initiative | Year | Main Ministry / Agency | Key Information |
| Administered Price Mechanism (APM) for Ethanol | 2014 (integrated into EBP in 2019) | MoPNG | Introduced administered pricing for ethanol supplied under the Ethanol Blended Petrol (EBP) Programme to improve commercial viability and ensure assured procurement. |
| National Policy on Biofuels (NPB) | 2018 (amended 2022) | MoPNG | Established Indias biofuel framework with targets of 20% ethanol blending by ESY 2025-26 and 5% biodiesel blending by 2030. The 2022 amendment expanded approved feedstocks and included advanced biofuels such as 2G ethanol, Compressed Biogas (CBG) and third-generation biofuels. |
| GST Reduction on Ethanol for EBP | 2018 | GST Council / MoPNG | Reduced GST on ethanol supplied under the EBP Programme from 18% to 5%, improving project economics. |
| Scheme to Enhance Ethanol Distillation Capacity & Interest Subvention | 2018 | Ministry of Consumer Affairs, Food & Public Distribution | Introduced interest subvention and soft loans for establishing new distilleries, expanding ethanol production capacity and supporting zero liquid discharge systems. |
| Diversification of Feedstocks for Ethanol Production | 2018-2020 | MoPNG | Permitted ethanol production from B-heavy molasses, sugarcane juice, sugar syrup, damaged food grains, surplus rice and maize, improving feedstock flexibility and supply security. |
| Ethanol Blended Petrol (EBP) Programme | 2019 | MoPNG | Expanded nationwide with differential pricing based on feedstock, administered pricing and assured procurement by Oil Marketing Companies (OMCs). |
| Long-Term Ethanol Procurement Policy | 2019-2023 | MoPNG | Introduced long-term procurement by OMCs through annual procurement targets, feedstock-specific pricing and assured offtake, providing investment certainty for ethanol producers. |
| Roadmap for Ethanol Blending in India 2020-25 | 2021 | MoPNG | Advanced Indias E20 blending target from 2030 to ESY 2025-26 and laid out the implementation roadmap. |
| Extension of the EBP Programme Across India | 2021 | MoPNG | Extended the EBP Programme across the country (except Andaman & Nicobar Islands and Lakshadweep), accelerating nationwide ethanol blending. |
| Additional Basic Excise Duty on Unblended Petrol | 2022 | Ministry of Finance | Levied an additional Basic Excise Duty of Rs.2 per litre on unblended petrol intended for retail sale, encouraging supply and consumption of ethanol- blended petrol. |
| Excise Duty Exemption for E12 & E15 Petrol | 2022 | Ministry of Finance | Exempted petrol blended with 12% and 15% ethanol from central excise duty to facilitate the phased transition towards higher ethanol blends. |
| Pradhan Mantri Jl- VAN Yojana | 2019 (amended 2024) | MoPNG | Provides financial assistance for demonstration and commercial-scale second-generation (2G) ethanol projects using lignocellulosic biomass. |
| Global Biofuels Alliance (GBA) | 2023 | Government of India (G20 Initiative) | Launched during Indias G20 Presidency to promote global cooperation on sustainable biofuels through technology collaboration, sustainability standards and market development. |
| Sustainable Aviation Fuel (SAF) Blending Roadmap | 2023 | MoPNG & Ministry of Civil Aviation | Established Indias SAF roadmap with blending targets of 1% by 2027, 2% by 2028 and 5% by 2030 for international aviation. |
| Policy / Initiative | Year | Main Ministry / Agency | Key Information |
| Scheme for Cooperative Sugar Mills | 2025 | Ministry of Consumer Affairs, Food & Public Distribution | Provides interest subvention for converting sugar- based ethanol plants into multi-feedstock facilities capable of processing grains and other feedstocks. |
| Export Policy for Second-Generation Ethanol | 2025 | MoPNG | Permitted exports of second-generation ethanol to support commercialisation of advanced biofuels. |
| E20 Ethanol Blended Petrol Notification & IS 17021:2018 Amendment No. 5 | 2026 | MoPNG & Bureau of Indian Standards (BIS) | Mandated nationwide sale of E20 petrol (minimum RON 95) and standardised homogeneous 20 1% ethanol blending through the revised BIS specification. |
| E20 Compliance Requirements for Imported Vehicles | 2026 | Ministry of Road Transport & Highways (MoRTH) | Required imported petrol passenger vehicles and two-wheelers to demonstrate emission compliance on E20 fuel and certify compatibility of fuel-system and engine components with 20% ethanol-blended petrol. |
| CMVR Amendments for Higher Ethanol Blend Vehicles (E20-E100) | 2026 | MoRTH | Proposed amendments to the Central Motor Vehicles Rules enabling certification of vehicles compatible with E20 to E100 fuels, updating emission standards and establishing the regulatory framework for pure ethanol-powered vehicles. |
| Permit Exemption for Alternative Fuel Transport Vehicles | 2026 | MoRTH | Exempted transport vehicles powered by electricity, ethanol, methanol and hydrogen from permit requirements under Section 66(1) of the Motor Vehicles Act for seven years, subject to installation of AIS-140 compliant Vehicle Location Tracking Devices (VLTDs). |
| Amendment to Aviation Turbine Fuel (ATF) Control Order | 2026 | MoPNG | Revised the definition of Aviation Turbine Fuel (ATF) to include blends containing synthesised hydrocarbons, establishing the regulatory framework for Sustainable Aviation Fuel (SAF) in India. |
| BIS Standards for Higher Ethanol Blends (E22, E25, E27 & E30) | 2026 | Bureau of Indian Standards (BIS) | Introduced Indian Standards for E22, E25, E27 and E30 gasoline, creating the regulatory framework for progressive adoption of ethanol blends beyond E20. |
Policies for the CBG Sector :
Sustainable Alternative Towards Affordable Transportation scheme introduced by the Government of India in 2018 (SATAT) – The SATAT initiatives ambitious target is to produce 15 million metric tonnes per annum (MMTPA) of CBG and a remarkable 50 MMTPA of bio-manure. The scheme envisages setting up of 5,000 CBG plants for production of 15 MMTPA of CBG by 2025, with an envisaged initial outlay of Rs. 30,000 crore for setting up of 900 plants in the first phase. As of March 2023, oil and gas marketing companies participating in the scheme have been issued 4,090 Letter of Intent and 58 CBG plants have been commissioned. SATAT scheme invites individuals or corporations to set up CBG plants, produce and supply CBG to OMCs.
CBG Blending Obligation - In November 2023, the Government of India made it mandatory for the City Gas Distribution (CGD) sector to blend CBG into the CNG (transport) and PNG (domestic) segments. This significant move aims to promote sustainable energy practices nationwide. Under the CBG Blending Obligation (CBO), CGD entities are required to mix CBG with natural gas, with the blending percentages gradually increasing over time. Initially starting as a voluntary effort until Fiscal 2025, the CBO mandates blend percentages of 1%, 3%, and 4% for Fiscal 2026, 2027 and 2028, respectively, and by Fiscal 2029, this obligation rises to 5%. Furthermore, until the CGD network is fully operational across the country, CBG marketed separately by all CGD entities will also count towards meeting the blending obligation.
CBD-CGD Synchronisation Scheme - The Ministry of Petroleum and Natural Gas has issued policy guidelines dated April 9, 2021 and October 26, 2021 for synchronization of CBG produced by plants in CGD networks. (Source: CRISIL Report) GAIL has been mandated to operationalize the Synchro Scheme and supply biogas/CBG co-mingled with domestic gas at Uniform Base Price to all CGD entities for use in CNG (Transport) and PNG (Domestic) segments of CGD network. The term of CBG-CGD Synchro Scheme has been further extended by 10 years. In February 2023, in an effort to prevent the stacking of taxes on blended CNG, the Ministry of Finance granted an exemption from excise duty on the portion equivalent to the GST paid on CBG when mixed with CNG.
CBG initiatives have the potential to produce carbon credits via the Clean Development Mechanism established by the United Nations Framework Convention on Climate Change - these carbon credits can be marketed to organizations and governments seeking to neutralize their carbon emissions, offering an extra income stream for CBG projects.
CBG projects fall under Agriculture infrastructure as per RBI guidelines. Loans to agriculture infrastructure are being classified under priority sector lending which has encouraged banks to sanction loans for CBG projects.
Market Development Assistance - The Department of Fertilizers has introduced a Market Development Assistance (MDA) scheme with an outlay of Rs.1,451.82 crore for three years, from Fiscal 2024 to Fiscal 2026. Under this scheme, an MDA of Rs.1500/MT will be granted for the sale of FOM, liquid FOM, phosphate-rich organic manure produced at biogas/CBG plants under the GOBARdhan initiative.
Department of Agriculture, & Farmers Welfare: Agri-Infra Fund - The Department of Agriculture & Farmers Welfare has introduced a new Scheme under the National Agriculture Infra Financing Facility called Agriculture Infrastructure Fund (AIF). The AIF offers financial assistance for investments in viable projects related to post-harvest management infrastructure and community farming assets. CBG is among the eligible projects under the community farming assets project. All loans obtained through this financing facility will benefit from a 3% per annum interest subvention, capped at a loan amount of Rs.2 crores. This subvention will be applicable for a maximum duration of 7 years.
Additionally, in 2023, India introduced the 2023 Carbon Credit Trading Scheme, encompassing both compliance and voluntary sectors. However, the compliance segment is scheduled to commence in 2025-26 and there is no set timeline for the launch of the voluntary carbon market. Nevertheless, it shows the intent towards sustainability. Under Indias revised carbon market scheme, obligated entities have the flexibility to purchase additional credits or sell surplus ones. Meanwhile, businesses can trade CCCs to offset their emissions. Such schemes will further boost green fuels and energies once they are brought into action.
Scheme for Development of Pipeline Infrastructure for injection of Compressed Biogas (CBG) in City Gas Distribution (CGD) network - The Ministry of Petroleum and Natural Gas announced a financial outlay of Rs.994.50 crore during the period of FY 2023-24 and FY 2025-26 for creating CBG CGD grid connectivity for 100 CBG projects and create ecosystem for offtake of CBG with reduced logistic cost.Waste to Energy Programme
Waste to Energy Programme
The programme by Ministry of New and Renewable Energy supports setting up projects for generating Biogas, Bio-CNG/Enriched Biogas/Compressed Biogas, Power, or syngas from urban, industrial, and agricultural waste/residues. It provides Central Financial Assistance (CFA) to project developers and service charges to implementing/inspection agencies upon successful commissioning.
• Bio-CNG/Enriched Biogas/CBG: Rs.4.0 crore per 4.800 kg/day (new plants), Rs.3.0 crore per 4.800 kg/day (existing plants), max Rs.10 crore per project.
• Power (from Biogas): Rs.0.75 crore/MW (new), Rs.0.5 crore/MW (existing), max Rs.5 crore/project.
• Power (from bio & agro-industrial waste): Rs.0.4 crore/MW, max Rs.5 crore/project.
• Biomass Gasifier: Rs.2,500/kWe (dual fuel), Rs.15,000/kWe (100% gas engines), Rs.2 lakh per 300 kWth (thermal).
• CFA is 20% higher for plants in Special Category
• States/UTs or registered Gaushalas/Shelters.
• Service charges are provided at 1% of total CFA (minimum Rs.50,000) for implementing and inspection agencies.
Financial Assistance to CBG Producers for Procurement of Biomass Aggregation Machinery
The Biomass Aggregation Machinery Scheme, administered by the Ministry of Petroleum & Natural Gas through the Centre for High Technology (CHT), provides financial support for CBG plants to procure agricultural residue collection and aggregation equipment. The aim is to ensure steady biomass supply for CBG production, reduce stubble burning, and improve feedstock logistics.
Financial Assistance: 50% of the cost of eligible machinery or Rs.90 lakh per set—whichever is lower—subject to a maximum of Rs.9 crore per project (on a pro-rata basis).
Eligibility: CBG plants (existing or under construction) with capacity >2 TPD using at least 50% biomass or 3,000 MT/year, registered on the GOBARdhan portal. Projects must have achieved minimum physical progress (25-50% depending on stage).
Eligible Machinery: Includes cutters, rakers, balers, tractors with attachments, trolleys, loaders, shredders, moisture meters, and related safety equipment.
Disbursement: Phased release—mobilization advance up to 10% (against bank guarantee), balance in installments based on progress milestones.
Scheme Duration: Applicable for FY 2023-24 to FY 2026-27, supporting the first 100 biomass-dependent CBG plants.
Biogas and Compressed Biogas (CBG) Policies in India
| Policy / Initiative | Year | Department | Key Information |
| Galvanizing Organic Bio-Agro Resources Dhan (GOBARdhan) | 2018 | Ministry of Jal Shakti | Promotes scientific management of biodegradable waste through production of biogas, CBG and organic manure under a circular economy framework. |
| Sustainable Alternative Towards Affordable Transportation (SATAT) | 2018 | MoPNG | Launched to establish a nationwide CBG ecosystem through assured offtake by Oil Marketing Companies (OMCs). The scheme targets 5,000 CBG plants, 15 MMTPA of CBG and 50 MMTPA of bio-manure, while encouraging private sector investment. |
| CBG-CGD Synchronisation Scheme | 2021 | MoPNG | Introduced a framework for synchronised injection of CBG into City Gas Distribution (CGD) networks through GAIL, enabling supply of co-mingled gas to CGD entities under a uniform pricing mechanism. |
| Waste-to- Energy (WtE) Programme / Central Financial Assistance (CFA) | 2022 | MNRE | Provides capital assistance for establishment of commercial biogas and CBG plants under the Waste-to-Energy Programme, supporting Bio-CNG infrastructure development. |
| National Biogas Programme | 2022 | MNRE | Supports installation of family-size and medium-scale biogas plants for clean cooking fuel and production of organic manure. |
| Excise Duty Relief for Blended CNG | 2023 | Ministry of Finance | Exempted the excise duty applicable to the CBG component in blended CNG to avoid double taxation and improve the economics of CBG blending. |
| CBG Blending Obligation (CBO) | 2023 | MoPNG | Mandated phased blending of CBG in transport (CNG) and domestic (PNG) segments of the CGD network, beginning at 1% in FY 2025-26, increasing to 3% in FY 2026-27, 4% in FY 202728, and 5% from FY 2028-29 onwards. |
| Unified Registration Portal for Biogas & CBG | 2023 (updated 2025) | Ministry of Jal Shakti & MoPNG | Established a single-window digital platform for registration, monitoring and subsidy management of biogas and CBG projects. |
| Market Development Assistance (MDA) for Organic Fertilisers | 2023 | Department of Fertilizers | Introduced an MDA scheme with an outlay of Rs.1,451.82 crore (FY 2024-26), providing Rs.1,500 per metric tonne for marketing Fermented Organic Manure (FOM), Liquid FOM (LFOM) and Phosphate-Rich Organic Manure (PROM) produced by CBG plants. |
| Agriculture Infrastructure Fund (AIF) | 2023 | Department of Agriculture & Farmers Welfare | Included CBG projects as eligible infrastructure under the Agriculture Infrastructure Fund, providing 3% interest subvention on loans up to Rs.2 crore for a maximum period of seven years. |
| Carbon Credit Trading Scheme (CCTS) | 2023 | Ministry of Power | Introduced Indias Carbon Credit Trading Scheme, enabling participation of renewable energy and CBG projects in emerging compliance and voluntary carbon markets. |
| Policy / Initiative | Year | Department | Key Information |
| Carbon Credit Trading Scheme (CCTS) | 2023 | Ministry of Power | Introduced Indias Carbon Credit Trading Scheme, enabling participation of renewable energy and CBG projects in emerging compliance and voluntary carbon markets. |
| Biomass Aggregation Machinery (BAM) Scheme | 2024 | MoPNG | Provides financial assistance for procurement of biomass aggregation machinery to improve feedstock collection and supply for CBG plants. |
| Scheme for Development of Pipeline Infrastructure (DPI) | 2024 | MoPNG | Approved a Rs.994.5 crore scheme (FY 2024-26) to develop pipeline infrastructure for injecting CBG into City Gas Distribution (CGD) networks, reducing logistics costs and improving market access. |
| Fertilizer Control Order (FCO) Amendment | 2025 | Department of Fertilizers | Introduced a dedicated category for organic carbon enhancers produced from CBG plants, facilitating commercial utilisation of digestate-based products. |
| Extension of the CBG-CGD Synchronisation Scheme | 2026 | MoPNG | Extended the CBG-CGD Synchronisation Scheme until 31 December 2047, providing long-term certainty for CBG injection into CGD networks, strengthening investor confidence and supporting large-scale expansion of Indias CBG ecosystem. |
OPPORTUNITIES AND THREATS
SWOT Analysis
Abundant Feedstock Availability
India possesses one of the worlds largest agricultural biomass resources, providing a sustainable and diversified feedstock base for ethanol, compressed biogas, Sustainable Aviation Fuel (SAF) and other advanced biofuels, while strengthening domestic energy security.
Strong Policy & Regulatory Support
India has established one of the worlds most comprehensive biofuels policy frameworks through initiatives such as the National Policy on Biofuels, Ethanol Blended Petrol Programme, SATAT, CBG Blending Obligation, PM JI-VAN Yojana and the National Green Hydrogen Mission, creating long-term demand visibility and encouraging investments across the renewable fuels value chain.
Expanding Domestic Energy Demand
Indias rapidly growing energy consumption, coupled with increasing emphasis on energy independence and decarbonisation, presents a significant long-term opportunity for renewable fuels across transportation, aviation, industry and city gas distribution.
Energy Security & Import Substitution
Biofuels are playing an increasingly strategic role in reducing Indias dependence on imported crude oil, natural gas and other fossil fuels, while strengthening national energy resilience amid an evolving geopolitical landscape.
Circular Bioeconomy & Rural Value Creation
The biofuels industry supports circular economy principles by converting agricultural residues and organic waste into renewable energy while creating additional income opportunities for farmers, generating rural employment and promoting sustainable agricultural practices.
Environmental Sustainability
Biofuels contribute to greenhouse gas emission reductions, improved waste management and the transition towards a low-carbon economy while supporting Indias Net Zero 2070 commitment.
Innovation & Technology Ecosystem
Indias expanding research capabilities, technology partnerships and increasing investments in advanced biofuels, renewable chemicals, green hydrogen and Sustainable Aviation Fuel provide a strong platform for long-term sectoral growth and global competitiveness.
Feedstock Availability & Seasonality
The availability of agricultural feedstock is influenced by seasonal crop cycles, weather conditions and competing end uses. Efficient feedstock aggregation, storage and logistics remain critical to ensuring uninterrupted operations and cost competitiveness.
Cost Competitiveness
Biofuels continue to compete with conventional fossil fuels, where economics are influenced by feedstock costs, technology efficiency, logistics and commodity price volatility. Continuous improvements in productivity and scale remain essential to sustaining competitiveness.
Technology Evolution
Commercialisation of advanced biofuels, Sustainable Aviation Fuel and emerging low-carbon technologies requires continued investment in innovation, technology partnerships and process optimisation to improve efficiencies and project economics.
Supply Chain & Infrastructure
Scaling the biofuels sector requires continued investments in feedstock logistics, storage, transportation, gas infrastructure and distribution networks to support increasing production and market penetration.
Regulatory Evolution
Although policy support remains strong, changes in blending mandates, pricing mechanisms, environmental regulations and fiscal incentives could influence project economics and investment decisions.
Talent & Capability Development
The industrys continued growth will require skilled professionals across biotechnology, engineering, operations, digital technologies and advanced manufacturing, making talent development an important long-term priority.
Global Market Dynamics
Commodity price movements, evolving international sustainability standards, trade policies and global competition may influence demand patterns, export opportunities and investment returns across renewable fuel markets.
OPPORTUNITIES AND THREATS
SWOT Analysis
Indias Energy Transition
Indias commitment to energy security, decarbonisation and Net Zero 2070 is expected to drive sustained growth across ethanol, compressed biogas (CBG), Sustainable Aviation Fuel (SAF), renewable chemicals and other bio-based industries.
Expanding Biofuels Policy Framework Progressive policy initiatives including E20 implementation, higher ethanol blends (E22-E30), CBG Blending Obligation, the National Green Hydrogen Mission and Indias emerging SAF roadmap provide long-term demand visibility and create new avenues for investment and growth.
Growing Sustainable Aviation Fuel (SAF) Market Global aviation decarbonisation commitments and Indias proposed SAF blending roadmap are expected to create significant long-term demand for Sustainable Aviation Fuel, positioning India as a potential global manufacturing and export hub.
Expansion of the CBG Ecosystem The CBG Blending Obligation, expansion of City Gas Distribution networks and increasing industrial demand for renewable gas are expected to accelerate investment and commercial deployment across the CBG sector.
Advanced Biofuels & Bioeconomy Growing demand for second-generation ethanol, renewable chemicals, bio-based materials and other value-added products presents opportunities to diversify revenue streams and enhance overall project economics.
Industrial Decarbonisation Increasing carbon reduction commitments across sectors such as steel, refining, fertilisers and chemicals are expected to drive demand for renewable fuels and low-carbon feedstocks beyond transportation applications.
International Market Opportunities Growing global demand for renewable fuels, SAF and bio-based products, together with initiatives such as the Global Biofuels Alliance, creates opportunities for India to emerge as a competitive exporter of sustainable energy solutions.
Innovation & Technology Partnerships Advancements in process technologies, digitalisation, biotechnology and strategic collaborations are expected to improve production efficiencies, reduce costs and accelerate the commercialisation of next-generation renewable fuels.
Feedstock Availability & Climate Risks
Climate variability, changing weather patterns and competing uses of agricultural biomass may impact feedstock availability, quality and pricing, affecting operational efficiency and production economics.
Policy & Regulatory Changes
Changes in blending mandates, pricing mechanisms, taxation, environmental regulations or incentive structures could influence market dynamics and project viability.
Competition from Alternative Technologies Rapid advancements in battery electric mobility, hydrogen technologies and other low-carbon energy solutions may alter the long-term demand profile for certain liquid fuels across specific applications.
Commodity Price Volatility
Fluctuations in agricultural commodity prices, crude oil prices, natural gas prices and foreign exchange rates may influence feedstock costs, fuel pricing and overall profitability.
Infrastructure & Supply Chain Constraints Continued expansion of biofuels will require investments in feedstock aggregation, logistics, storage, transportation and distribution infrastructure to support large-scale commercial deployment.
Technology & Execution Risks
The commercialisation of advanced biofuels and emerging clean energy technologies requires continued innovation, efficient project execution and successful technology integration to achieve targeted returns.
Geopolitical & Macroeconomic Uncertainty
Global geopolitical developments, trade policies, supply chain disruptions and economic slowdowns may impact investment flows, commodity markets and international demand for renewable fuels.
Public Perception & Sustainability Expectations Ongoing debates surrounding land use, food security, sustainability standards and lifecycle emissions may influence regulatory priorities, consumer sentiment and market acceptance if not addressed through science-based policy and responsible sourcing.
TruAlt Bioenergy is uniquely positioned to participate in Indias evolving energy transition, supported by a diversified bioenergy platform, integrated operations and a clear long-term strategic vision. As the country accelerates its transition towards cleaner fuels, greater energy security and a circular bioeconomy, the Company remains well placed to capitalise on the significant opportunities emerging across Ethanol, Compressed Biogas (CBG), Sustainable Aviation Fuel (SAF) and other next-generation renewable energy solutions.
Indias favourable policy environment, abundant agricultural resources, expanding biofuels ecosystem and increasing focus on reducing dependence on imported fossil fuels provide a strong foundation for sustained long-term growth. Through disciplined capital allocation, technology partnerships, operational excellence and continued investments across the renewable fuels value chain, TruAlt continues to strengthen its competitive position while contributing to the nations energy security, rural prosperity and industrial decarbonisation objectives.
The Company continues to strengthen its integrated bioenergy ecosystem by leveraging feedstock flexibility, operational efficiencies and technology-led innovation. Being one of Indias largest ethanol manufacturing platforms with dual-feed capabilities, strategic investments in Compressed Biogas, and ongoing development of Sustainable Aviation Fuel, TruAlt is building a diversified portfolio capable of addressing multiple segments of the evolving clean energy market. This integrated approach not only enhances operational resilience but also enables greater resource optimisation by maximising value from agricultural feedstocks and industrial by-products.
As the global energy landscape shifts towards lower-carbon fuels, TruAlt is also positioning itself to participate in emerging opportunities beyond conventional biofuels. The Companys investments in advanced biofuels, Sustainable Aviation Fuel and future renewable fuel technologies are aligned with evolving domestic policies, international decarbonisation commitments and growing demand from hard-to-abate sectors such as aviation, heavy transport and industry.
These initiatives are expected to further diversify revenue streams while reinforcing the Companys long-term growth trajectory.
Sustainability will continue to remain central to TruAlts long-term strategy. Beyond contributing to greenhouse gas emission reductions, the Company remains committed to creating shared value by supporting farmers, promoting efficient resource utilisation, advancing circular economy principles and generating positive socio-economic outcomes across rural communities. Through responsible operations, strong governance practices and continuous investments in environmental and social initiatives, TruAlt seeks to create lasting value for all stakeholders.
The Company also recognises that long-term success will increasingly be determined by innovation, adaptability and strategic partnerships. Continued investments in process optimisation, digitalisation, research and development, and collaborations with leading technology providers will enable TruAlt to improve operational efficiency, strengthen product quality and accelerate the commercialisation of next-generation renewable energy solutions. These capabilities will enhance the Companys ability to respond to evolving market dynamics while maintaining operational excellence across its diversified portfolio.
Looking ahead, Indias bioeconomy is expected to evolve beyond conventional renewable fuels towards a broader ecosystem encompassing bio-based chemicals, low-carbon industrial feedstocks, renewable gases and future fuels. TruAlt believes its integrated platform, diversified asset base and execution capabilities provide a strong foundation to participate in these emerging opportunities while supporting Indias long-term vision of energy independence, industrial competitiveness and Net Zero aspirations.
While the operating environment will continue to evolve, the Company remains confident that the long-term fundamentals of Indias bioenergy sector have never been stronger. With its integrated business model, diversified portfolio, strong operational capabilities and disciplined approach to growth, TruAlt Bioenergy is well positioned to create sustainable long-term value for its stakeholders while playing a meaningful role in shaping Indias transition towards a cleaner, more resilient, self-reliant and globally competitive energy future.
COMPANY OVERVIEW
TruAlt Bioenergy Limited is one of Indias largest integrated biofuels companies and the countrys only dedicated listed bioenergy enterprise, playing a pivotal role in advancing Indias energy transition and bioeconomy. Anchored by deep agricultural linkages, diversified feedstock capabilities and large-scale industrial infrastructure, the Company has built a fully integrated renewable fuels platform spanning ethanol, compressed biogas (CBG), Sustainable Aviation Fuel (SAF) and other emerging low-carbon energy solutions.
With one of the largest installed ethanol production capacities in the country, TruAlt has been at the forefront of supporting Indias Ethanol Blended Petrol (EBP) Programme and strengthening the nations energy security. The Companys integrated operations, multi-feedstock flexibility and strong relationships across the agricultural value chain position it among the leading contributors to Indias renewable fuels ecosystem.
TruAlt has consistently demonstrated its ability to anticipate and lead industry transformation. It was among the earliest producers of Compressed Biogas (CBG) under the Government of Indias SATAT (Sustainable Alternative Towards Affordable Transportation) initiative launched in 2018, reinforcing its commitment to circular resource utilisation and low-carbon mobility.
Further strengthening its leadership position, TruAlt became the first biofuels company in India to be granted Oil Marketing Company (OMC) status, establishing a significant milestone in the evolution of the countrys renewable fuels industry. This recognition enables the Company to participate across the entire energy value chain from renewable fuel production to downstream retail marketing, creating an integrated platform for serving both institutional and retail energy markets.
Building on its strong ethanol ecosystem, TruAlt is now strategically positioned at the forefront of Indias next generation of renewable fuels. The Company is among the early movers in Sustainable Aviation Fuel (SAF) and is progressing towards establishing one of Indias largest integrated SAF production facilities. Leveraging its existing feedstock ecosystem, industrial infrastructure and expertise in biofuels, TruAlt aims to play a leading role in decarbonising the aviation sector while supporting Indias emergence as a global SAF hub.
Beyond renewable fuels, the Company is developing an integrated circular bioeconomy that maximises value from every stage of the production cycle. Through the manufacture of Fermented Organic Manure (FOM), Liquid Fermented Organic Manure (LFOM), recovery and utilisation of liquefied carbon dioxide (CO 2 ), renewable energy generation and the development of value-added bio-based products, TruAlt continues to strengthen resource efficiency and advance circular economy principles. This integrated approach reinforces the Companys long-term vision of becoming a diversified renewable energy and bio-based manufacturing platform.
As India accelerates its transition towards a low-carbon economy, TruAlt Bioenergy is strategically positioned to play a defining role in shaping the future of renewable fuels through innovation, integrated bioenergy solutions and a steadfast commitment to sustainability, energy security and long-term value creation.
Strategic Initiatives
Indias energy transition is entering a defining phase, driven by the convergence of energy security, decarbonisation, technological innovation and favourable policy support. As the renewable fuels ecosystem expands beyond conventional blending programmes towards advanced biofuels and integrated low-carbon energy solutions, TruAlt Bioenergy is strategically positioned to capitalise on this structural transformation. The Companys long-term strategy is centred on strengthening its leadership across the renewable fuels value chain while creating a diversified and future-ready bioenergy platform capable of delivering sustainable growth and long-term stakeholder value.
Scaling Leadership in Ethanol
TruAlt Bioenergy remains one of Indias largest ethanol producers, with an installed production capacity of approximately 2,000 KLPD, supported by a diversified portfolio of grain-based, sugar-based and dual-feed distilleries. Having established a robust manufacturing platform, the Companys strategic priority is to maximise capacity utilisation across its existing assets by enhancing feedstock flexibility, improving operational efficiencies and leveraging technology-driven process optimisation. This approach is expected to enable near year-round operations, strengthen asset productivity and improve overall profitability while supporting sustainable long-term growth.
Indias successful achievement of 20% ethanol blending (E20) marks a defining milestone in the countrys biofuels journey. At the same time, the policy landscape continues to evolve beyond E20. The nationwide rollout of E20 fuel, the introduction of BIS specifications for E22, E25, E27 and E30, regulatory provisions enabling vehicle certification up to E100, and revised blending standards collectively signal the next phase of Indias ethanol programme. These developments are expected to deepen ethanol penetration across the transportation sector, improve utilisation of the countrys installed ethanol capacity and reinforce ethanols role as a strategic pillar of Indias energy security and decarbonisation agenda.
Against this backdrop, TruAlt is well positioned to capitalise on the structural growth opportunities emerging across the ethanol value chain. The Companys integrated manufacturing capabilities, diversified feedstock ecosystem, strong operational platform and long-standing relationships across the agricultural and energy sectors provide a strong competitive advantage to meet growing domestic demand while supporting Indias transition towards a more resilient, self-reliant and sustainable energy economy. As the regulatory framework continues to evolve and higher ethanol blends gain wider adoption, the Company remains focused on driving operational excellence, enhancing returns on existing assets and creating long-term value for all stakeholders.
Building a Scalable Compressed Biogas (CBG) Platform
Compressed Biogas (CBG) represents one of TruAlt Bioenergys most significant long-term growth platforms and a strategic pillar of the Companys vision to build an integrated renewable energy ecosystem. As India accelerates its transition towards cleaner gaseous fuels through the CBG Blending Obligation (CBGO), TruAlt is well positioned to capitalise on the increasing demand for sustainable gas solutions that support energy security, import substitution, circular economy objectives and rural value creation.
To strengthen its leadership in this high-growth segment, the Company has entered into strategic joint ventures with GAIL (India) Limited, one of Indias largest natural gas companies, and Sumitomo Corporation, one of Japans leading integrated trading and investment companies. These partnerships combine TruAlts expertise in feedstock sourcing and bioenergy operations with the technological, commercial and infrastructure capabilities of globally recognised partners, creating a strong platform for long-term growth.
As part of its expansion strategy, TruAlt is targeting the development of 24 Compressed Biogas plants over the next two years. Construction is currently underway across 4 CBG facilities under TruAlt Gas Private Limited, while land has been identified for 6 additional plants under Leafiniti Bioenergy, with construction expected to commence shortly. These projects represent the initial phase of a scalable development pipeline that will significantly strengthen the Companys presence in Indias emerging CBG ecosystem.
Beyond expanding production capacity, the Companys CBG strategy is focused on building an integrated circular bioeconomy by converting agricultural residues, organic waste and process by-products into clean gaseous fuel and other value-added products. This approach not only enhances resource efficiency and creates additional revenue streams but also supports sustainable waste management, reduces greenhouse gas emissions and generates incremental income opportunities for rural communities.
Supported by progressive policy measures, including the CBG Blending Obligation, long-term integration of CBG into the national gas grid and increasing adoption across the CNG and PNG segments, the Company believes the CBG sector is poised for significant long-term growth. Leveraging its integrated bioenergy platform, strategic partnerships and execution capabilities, TruAlt is well positioned to become one of Indias leading producers of Compressed Biogas while contributing meaningfully to the countrys clean energy transition and circular economy objectives.
Establishing Leadership in Sustainable Aviation Fuel
Sustainable Aviation Fuel (SAF) represents one of the most significant long-term opportunities within the global energy transition and is expected to play a pivotal role in decarbonising the aviation sector. As global airlines, regulators and governments accelerate the adoption of low-carbon aviation fuels, TruAlt Bioenergy is strategically positioning itself at the forefront of Indias emerging SAF ecosystem.
The Company is progressing the development of its proposed 310 KLPD Sustainable Aviation Fuel facility at Srikakulam, Andhra Pradesh, which is expected to be among the largest SAF production facilities in India. The project benefits from a strategically selected location with access to abundant feedstock, proximity to HPCLs Visakh Refinery, Indian Oil Corporations Paradip Refinery, Visakhapatnam Port, the upcoming Mulapeta Port, the Howrah-Chennai railway corridor and Visakhapatnam International Airport, providing significant advantages in logistics, feedstock sourcing, domestic distribution and export connectivity.
To support the development of the project, the Company is progressing towards the Front-End Engineering Design (FEED) stage in collaboration with Honeywell UOP, one of the worlds leading providers of refining and sustainable fuels technologies. Simultaneously, statutory approvals are progressing, while discussions with the Government of Andhra Pradesh regarding the incentive framework continue to advance. The project has also received approval for Rs.150 crore of financial assistance under the Government of Indias PM JI-VAN Yojana, reinforcing its strategic importance in advancing Indias next generation of biofuels. Subject to the receipt of necessary approvals and financial closure, the project is expected to be commissioned within 24 to 30 months.
Indias rapidly expanding ethanol ecosystem, growing second-generation biofuels capacity and abundant agricultural biomass provide a compelling foundation for commercialising the Alcohol-to-Jet (ATJ) pathway. With ATJ-derived Sustainable Aviation Fuel approved for blending with conventional Aviation Turbine Fuel (ATF) at up to 50% under international ASTM specifications, Indias mature ethanol infrastructure provides a distinct competitive advantage for large-scale SAF production. Coupled with the Governments evolving regulatory framework, including the proposed 1%, 2% and 5% SAF blending roadmap for international flights, the Company believes India is well positioned to emerge as a globally competitive SAF manufacturing hub.
Leveraging its integrated biofuels platform, diversified feedstock ecosystem, technology partnerships and large-scale execution capabilities, TruAlt aims to play a leading role in shaping Indias Sustainable Aviation Fuel industry while supporting the decarbonisation of aviation, strengthening energy security and creating a globally competitive renewable fuels business for the future.
Expanding Downstream Market Presence
Following our landmark achievement of becoming the first biofuels company in India to be granted Oil Marketing Company (OMC) status, TruAlt continues to strengthen its downstream presence through a disciplined and strategically phased retail expansion programme. This milestone marks a significant evolution in the Companys business model, enabling participation across the entire energy value chain from renewable fuel production to direct consumer engagement through fuel retailing.
The Company currently operates 7 retail fuel outlets, with 4 additional outlets under construction and a robust pipeline of approximately 76 strategically shortlisted locations identified for future development. Expansion is being pursued through a calibrated approach that prioritises long-term value creation, strategic location selection, operational excellence and capital discipline over rapid network growth.
By integrating its upstream renewable fuels business with a growing downstream retail network, TruAlt aims to strengthen market access, enhance customer engagement and create a differentiated energy platform capable of supplying cleaner fuels to end consumers. As Indias fuel retail sector evolves alongside increasing adoption of ethanol-blended fuels and other renewable energy solutions, the Company believes its integrated upstream-to-downstream model will enhance commercial resilience, improve value realisation and reinforce its leadership across the renewable fuels value chain.
Advancing the Circular Bioeconomy
TruAlts long-term strategy extends beyond renewable fuel production to the development of an integrated circular bioeconomy that maximises value across the entire biomass value chain. By adopting a zero-waste philosophy, the Company transforms process by-products into high-value products, including Fermented Organic Manure (FOM), Liquid Fermented Organic Manure (LFOM) and liquefied carbon dioxide (CO 2 ), while continuously exploring opportunities across renewable chemicals, bio-based materials and other value-added products .
This integrated approach enables the efficient utilisation of renewable resources, enhances overall project economics and strengthens the sustainability of the Companys operations. By converting agricultural feedstocks into multiple high-value outputs, TruAlt is creating a diversified bio-based platform that supports soil health, resource efficiency, emissions reduction and circular manufacturing.
As global markets increasingly transition towards sustainable materials and low-carbon products, the Company believes the circular bioeconomy will emerge as a significant driver of long-term growth. Leveraging its integrated infrastructure, diversified feedstock ecosystem and innovation-led approach, TruAlt is well positioned to create value beyond renewable fuels while supporting Indias transition towards a resource-efficient, low-carbon and globally competitive bioeconomy.
Investing in the Future of Energy
The energy transition is reshaping global economic and industrial priorities. What began as a climate imperative has evolved into a broader strategic objective centred on energy security, supply chain resilience and sustainable economic growth. Recent geopolitical developments have reinforced the importance of building domestic energy capabilities, accelerating the deployment of renewable fuels and reducing dependence on imported fossil fuels. In this evolving landscape, biofuels are no longer viewed solely as alternative fuels; they are increasingly recognised as strategic assets capable of strengthening national competitiveness while supporting the transition to a lower-carbon economy.
India is exceptionally well positioned to benefit from this structural shift. The country combines one of the worlds largest agricultural resource bases with a mature ethanol ecosystem, progressive policy support, expanding industrial infrastructure and a rapidly growing domestic market. Having successfully established a robust first-generation biofuels platform, India is now entering the next phase of its energy transition, with increasing emphasis on advanced biofuels, Sustainable Aviation Fuel (SAF), compressed biogas (CBG), renewable chemicals and other bio-based products. This evolution has the potential to position India not only as one of the worlds largest consumers of renewable fuels, but also as a globally competitive producer of sustainable energy solutions.
At TruAlt, we see this transition as a multi-decade opportunity. Our strategy is centred on building an integrated renewable energy platform that extends beyond conventional ethanol into next-generation fuels and circular bio-based industries. Through disciplined capital allocation, strategic partnerships, technology-led innovation and continued investment in scalable infrastructure, we are creating capabilities that are aligned with the future direction of both Indias energy landscape and global fuel markets.
Our approach is underpinned by a simple conviction: the energy transition will increasingly be driven by diversification rather than substitution. Over the coming decades, conventional fuels, renewable fuels, renewable gases, green molecules and bio-based materials are expected to coexist, each addressing distinct sectors and applications. Companies with integrated platforms, diversified feedstocks and the ability to adapt across technologies will be best positioned to create long-term value.
The events of recent years have demonstrated that energy security and sustainability are not competing priorities they are mutually reinforcing. Countries that can produce clean energy domestically will be better positioned to enhance economic resilience, strengthen industrial competitiveness and reduce exposure to external shocks. Biofuels, by virtue of their ability to leverage existing infrastructure while creating value across agriculture, manufacturing and transportation, are uniquely positioned to contribute to these objectives.
As Indias bioeconomy continues to evolve, we believe the opportunity extends well beyond meeting domestic demand. The emergence of global markets for Sustainable Aviation Fuel, renewable chemicals and other low-carbon products is expected to redefine the role of renewable carbon in the global economy.
Supported by its integrated operating platform, diversified portfolio and strong execution capabilities, TruAlt is positioning itself to participate meaningfully in this transformation.
We believe the coming decade will mark the transition of biofuels from a blending programme to a strategic industrial sector. The foundations have been established through progressive policy, sustained investment and demonstrated execution. The next phase will be characterised by innovation, integration and scale. TruAlt intends to remain at the forefront of this evolution-building businesses that strengthen Indias energy security, contribute to industrial decarbonisation and create enduring value for shareholders and society.
Financial Overview (Standalone & Consolidated)
Standalone Financial Information
Our revenue from operations declined to Rs.1,70,465.34 lakhs in Fiscal 2026, as against Rs.1,88,011.66 lakhs in Fiscal 2025, a decline of 9.33%, on account of lower ethanol tender allocation and the temporary shutdown of three plants during their transition from mono-feed to multi-feed operations. Our total income similarly declined to Rs.1,77,293.69 lakhs in Fiscal 2026, as against Rs.1,94,070.60 lakhs in Fiscal 2025, a decline of 8.64%, during the year.
EBITDA stood at Rs.28,313.41 lakhs in Fiscal 2026, as against Rs.29,719.38 lakhs in Fiscal 2025. Finance costs for the year stood at Rs.15,785.20 lakhs, as against Rs.14,103.64 lakhs incurred in Fiscal 2025. Depreciation and amortisation expenses stood at Rs.8,409.08 lakhs in Fiscal 2026 and Rs.6,459.57 lakhs in Fiscal 2025 - comprising depreciation of Rs.7,154.63 lakhs and amortisation of intangible assets and right-of-use assets of Rs.1,254.45 lakhs in Fiscal 2026, and depreciation of Rs.5,232.93 lakhs and amortisation of intangible assets and right-of-use assets of Rs.1,226.64 lakhs in Fiscal 2025 - the increase being on account of an increase in gross block by Rs.42,978.51 lakhs.
Net Worth increased to 71,51,350.07 lakhs in Fiscal 2026, as against 776,753.22 lakhs in Fiscal 2025, on account of the issue of equity shares pursuant to the initial public offering. Total Assets correspondingly increased to 73,62,925.28 lakhs in Fiscal 2026, as against 72,97,776.01 lakhs in Fiscal 2025.
Net Working Capital stood at 756,698.07 lakhs in Fiscal 2026, as against 717,604.90 lakhs in Fiscal 2025, primarily on account of an increase in inventories of 731,762.48 lakhs, an increase in trade receivables of 76,806.56 lakhs and an increase in other assets of 74,974.67 lakhs and other financial assets of 7178.05 lakhs, partly offset by a reduction in trade payables of 719,851.65 lakhs.
Cash Flow
Operating Activities:
Net cash flow generated from operating activities was 7 (29,615.04) lakhs in Fiscal 2026. Profit before tax for the year was 710,947.48 lakhs, with the primary working capital adjustments comprising an increase in inventories of 731,762.48 lakhs and a decrease in trade payables of 719,851.65 lakhs.
Investing Activities:
Net cash flow used in investing activities in Fiscal 2026 was 735,838.67 lakhs, primarily on account of payments for the purchase of property, plant and equipment (including capital work-in-progress) of 731,450.05 lakhs and investment in bank deposits of 72,262.79 lakhs.
Financing Activities:
Net cash flow from financing activities in Fiscal 2026 was 755,476.59 lakhs, primarily on account of proceeds from the issuance of equity shares of 766,570.56 lakhs and proceeds from short-term borrowings of 722,057.11 lakhs, partly offset by repayment of long-term borrowings of 717,255.60 lakhs and interest payments of 715,736.06 lakhs.
Key Financial Ratios
The table below sets out the key financial ratios for Fiscal 2026 as compared to Fiscal 2025, together with explanations for changes of 25% or more, in line with the disclosure format prescribed under Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
| Ratio | FY 2026 | FY 2025 | Variance (%) | Reason for Variance |
| Interest Coverage Ratio | 1.61 | 2.09 | (22.97)% | - |
| Return on Capital Employed (ROCE) | 11.59% | 15.89% | (27.06)% | Decline is mainly on account of lower operating profitability during the year, coupled with a significant increase in capital employed following the equity infusion pursuant to the initial public offering. |
| Return on Equity (ROE) | 5.29% | 18.32% | (71.12) % | Decline is mainly on account of lower net profit for the year, coupled with a substantially higher equity base consequent to the initial public offering. |
| Debt / Equity Ratio | 0.61 | 1.44 | (57.64) % | Improvement is mainly on account of the increase in net worth pursuant to the initial public offering, along with repayment of borrowings during the year. |
| Debt / EBITDA Ratio | 3.29 | 3.71 | (11.32) % | - |
| Operating Profit Margin | 15.68% | 15.59% | 0.58% | - |
| Net Profit Margin | 4.69% | 7.48% | (37.30) % | Decline is mainly on account of lower net profit during the year, driven by reduced revenue from operations due to lower ethanol tender allocation and temporary shutdown of three plants, coupled with higher finance costs and depreciation. |
| Debtors Turnover Ratio | 4.58 | 5.92 | (22.64) % | - |
| Inventory Turnover Ratio | 3.06 | 7.05 | (56.60) % | Decline is mainly on account of a significant increase in average inventory during the year owing to inventory build-up during the transition of plants from mono-feed to multifeed operations, coupled with lower tender allocation. |
| Net Working Capital Cover | 1.67 | 1.20 | 39.17% | Improvement is mainly on account of an increase in current assets dominated by inventory, funded through proceeds of the initial public offering, partly offset by a reduction in trade payables. |
Consolidated Financial Information
Our revenue from operations declined to Rs.1,72,750.66 lakhs in Fiscal 2026, as against Rs.1,90,772.40 lakhs in Fiscal 2025, a decline of 9.45%, on account of lower ethanol tender allocation and the temporary shutdown of three plants during their transition from mono-feed to multi-feed operations. Our total income similarly declined to Rs.1,81,395.91 lakhs in Fiscal 2026, as against Rs.1,96,852.78 lakhs in Fiscal 2025, a decline of 7.85%, during the year.
EBITDA stood at Rs.28,975.39 lakhs in Fiscal 2026, as against Rs.30,914.37 lakhs in Fiscal 2025. Finance costs for the year stood at Rs.16,002.41 lakhs, as against Rs.14,361.10 lakhs incurred in Fiscal 2025. Depreciation and amortisation expenses stood at Rs.8,622.76 lakhs in Fiscal 2026 and Rs.6,689.37 lakhs in Fiscal 2025 - comprising depreciation of Rs.7,363.90 lakhs and amortisation of intangible assets and right-of-use assets of Rs.1,258.86 lakhs in Fiscal 2026, and depreciation of Rs.5,443.12 lakhs and amortisation of intangible assets and right-of-use assets of Rs.1,246.25 lakhs in Fiscal 2025 - the increase being on account of an increase in gross block by Rs.44,574.53 lakhs.
Net Worth increased to Rs.1,57,833.50 lakhs in Fiscal 2026, as against Rs.76,899.90 lakhs in Fiscal 2025, on account of the issue of equity shares pursuant to the initial public offering. Total Assets correspondingly increased to Rs.3,77,834.29 lakhs in Fiscal 2026, as against Rs.3,02,973.09 lakhs in Fiscal 2025.
Net Working Capital stood at Rs.61,629.89 lakhs in Fiscal 2026, as against Rs.16,780.42 lakhs in Fiscal 2025, primarily on account of an increase in inventories of Rs.31,821.96 lakhs, an increase in trade receivables of Rs.6,684.18 lakhs and an increase in other assets of Rs.5,308.96 lakhs and other financial assets of Rs.176.32 lakhs, partly offset by a reduction in trade payables of Rs.21,359.46 lakhs.
Cash Flow
Operating Activities: Net cash flow generated from operating activities was Rs.(29,562.92) lakhs in Fiscal 2026. Profit before tax for the year was Rs.12,995.47 lakhs, with the primary working capital adjustments comprising an increase in inventories of Rs.31,821.96 lakhs and a decrease in trade payables of Rs.21,359.46 lakhs.
Investing Activities: Net cash flow used in investing activities in Fiscal 2026 was Rs.41,345.13 lakhs, primarily on account of payments for the purchase of property, plant and equipment (including capital work-in-progress) of Rs.51,068.32 lakhs and investment in bank deposits of Rs.2,579.06 lakhs, partly offset by prepayments towards the acquisition of capital assets of Rs.11,706.01 lakhs.
Financing Activities: Net cash flow from financing activities in Fiscal 2026 was Rs.64,756.43 lakhs, primarily on account of proceeds from the issuance of equity shares of Rs.66,570.56 lakhs and proceeds from short-term borrowings of Rs.22,454.81 lakhs, partly offset by repayment of long-term borrowings of Rs.12,847.38 lakhs and interest payments of Rs.15,953.27 lakhs.
Key Financial Ratios
The table below sets out the key financial ratios for Fiscal 2026 as compared to Fiscal 2025 on a consolidated basis, together with explanations for changes of 25% or more, in line with the disclosure format prescribed under Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
| Ratio | FY 2026 | FY 2025 | Variance (%) | Reason for Variance |
| Interest Coverage Ratio | 1.61 | 2.14 | (24.77) % | - |
| Return on Capital Employed (ROCE) | 11.29% | 16.39% | (31.12) % | Decline is mainly on account of lower operating profitability during the year, coupled with a significant increase in capital employed following the equity infusion pursuant to the initial public offering. |
| Ratio | FY 2026 | FY 2025 | Variance (%) | Reason for Variance |
| Return on Equity (ROE) | 6.14% | 19.07% | (67.80) % | Decline is mainly on account of lower net profit for the year, coupled with a substantially higher equity base consequent to the initial public offering. |
| Debt / Equity Ratio | 0.63 | 1.45 | (56.55) % | Improvement is mainly on account of the increase in net worth pursuant to the initial public offering, along with repayment of borrowings during the year. |
| Debt / EBITDA Ratio | 3.41 | 3.61 | (5.54) % | - |
| Operating Profit Margin | 16.79% | 15.89% | 5.66% | - |
| Net Profit Margin | 5.61% | 7.69% | (27.05) % | Decline is mainly on account of lower net profit during the year, driven by reduced revenue from operations due to lower ethanol tender allocation and temporary shutdown of three plants, coupled with higher finance costs and depreciation. |
| Debtors Turnover Ratio | 4.64 | 5.99 | (22.54) % | - |
| Inventory Turnover Ratio | 3.02 | 6.88 | (56.10) % | Decline is mainly on account of a significant increase in average inventory during the year owing to inventory build-up during the transition of plants from mono-feed to multifeed operations, coupled with lower tender allocation. |
| Net Working Capital Cover | 1.71 | 1.19 | 43.70% | Improvement is mainly on account of an increase in current assets dominated by inventory, funded through proceeds of the initial public offering, partly offset by a reduction in trade payables. |
Segment-Wise Highlights for Year Ended March 31, 2026
| Rs. 1771.10 Cr. ( fy 26 ) | Rs. 106.67 Cr. ( fy 26 ) | Rs. 77.37 Cr. ( fy 26 ) |
| Total Income | PBT | PAT |
| (8.71)% Rs. (YoY) | (29.70)% t (YoY) | (44.85)% t (yoy) |
| Rs. 1940.11 Cr. ( fy 25 ) | Rs. 151.74 Cr. ( fy 25 ) | Rs. 140.31 Cr. ( fy 25 ) |
Compressed Bio-Gas (CBG)
| Rs. 42.86 Cr. ( fy 26) | Rs. 23.28 Cr. ( fy 26) | Rs. 19.50 Cr. ( fy 26) |
| Total Income | PBT | PAT |
| 50.80% (YoY) | 202.30% t (yoy) | 207.97% t (yoy) |
| Rs. 28.42 Cr. ( fy 25) | Rs. 7.70 Cr. ( fy 25) | Rs. 6.33 Cr. ( fy 25) |
Internal control systems and their adequacy
Internal control systems and their adequacy TruAlt Bioenergy has implemented a comprehensive internal control framework aligned with encompassing control environment, risk assessment, control activities, information and communication, and ongoing monitoring. This system supports the Companys integrated operations across ethanol, bioenergy, and allied businesses, ensuring accuracy in financial reporting, operational efficiency, regulatory compliance and asset protection across its facilities. The internal control structure is anchored in accountability and transparency, supported by well-defined policies, Standard Operating Procedures (SOPs), authorization hierarchies, and routine assessments conducted at plant, functional, and corporate levels. H Financial Controls TruAlt Bioenergy has instituted robust financial controls across all critical business processes including procurement, revenue recognition, working capital management and capital expenditure. A maker-checker-approver mechanism ensures transactional integrity and SAP-based automation enhances traceability and compliance. Quarterly and annual financial statements are prepared in strict adherence to Indian Accounting Standards (Ind AS) and reviewed or audited by statutory auditors. These controls collectively support reliability in financial disclosures and adherence to all applicable statutory and regulatory frameworks. H Operational Controls Each vertical ethanol, CBG and allied operations follows a tailored control matrix governing procurement, production efficiency, logistics and quality management. Real-time tracking systems monitor key parameters and output. H Compliance and Risk Management Controls The Company maintains a centralized compliance tracking system that oversees regulatory filings, environmental permissions, ethanol blending mandates and industry-specific directives from central and state authorities. The Risk Management Committee, chaired by senior management, conducts regular reviews of key risks, audit findings, mitigation strategies and emerging threats. These insights are escalated to the Audit Committee, ensuring that oversight remains timely and effective.
IT and Cybersecurity Controls Recognizing the importance of digital resilience, the Company has implemented multi-layered cybersecurity measures, including firewalls, endpoint protection and encryption standards. Role-based access controls and real-time system monitoring protect critical assets and data integrity. Routine cybersecurity audits, disaster recovery drills, and penetration testing are conducted to validate system robustness and incident response readiness. These safeguards are essential in todays data-driven operating environment.
Internal Audit
An independent internal audit firm has been appointed to conduct risk-based audits in line with a Board-approved annual audit plan. These audits assess both the design and operational effectiveness of controls across business functions and processes.
During FY 2025-26, ZADN conducted a comprehensive review of the operative effectiveness of Internal Financial Controls (IFC). The assessment included detailed testing across processes, summary results, and managements action plans for addressing observations. The findings were reviewed by the Audit Committee and presented to the Board of Directors. Open communication is maintained with both internal and statutory auditors to ensure transparency and continual enhancement of the internal control environment.
Human Resources
At TruAlt Bioenergy, our people are the driving force behind our growth, innovation and long-term value creation. We believe that a high-performing, engaged and future-ready workforce is fundamental to sustaining our leadership in the evolving bioenergy sector. Accordingly, we remain committed to nurturing talent, strengthening capabilities and fostering an inclusive, collaborative and performance-oriented workplace that enables our employees to thrive.
Our human capital strategy is centred on continuous learning, capability building and leadership development. Through structured learning and development initiatives, we equip our employees with the technical expertise, managerial capabilities and behavioural competencies required to excel in an increasingly dynamic business environment. During the year, employees participated in a wide range of training programmes covering technical and operational excellence, business and functional competencies, leadership development, workplace safety, regulatory compliance, ethics, corporate values and the Companys Code of Conduct.
As the Company continues to expand its presence across conventional and advanced biofuels, we remain focused on building a workforce that is agile, resilient and equipped to embrace emerging technologies, evolving industry practices and future growth opportunities. By fostering a culture of continuous learning, innovation and accountability, we empower our employees to realise their full potential while contributing meaningfully to the Companys strategic objectives and long-term sustainable growth. As on 31 March 2026, the Company had a workforce of 952 employees, whose commitment, expertise and shared purpose continue to be the foundation of TruAlt Bioenergys success.
Risk Management Approach / Risks and Concerns
The Company continues to adopt a forward-looking and integrated risk management strategy, aimed at safeguarding its long-term sustainability and operational resilience. Building on the foundation laid in previous years, our framework has evolved to encompass dynamic risk identification, real-time assessment and strategic mitigation aligned with enterprise objectives. This year, our focus has expanded further into predictive analytics, scenario planning and early-warning indicators, enabling proactive risk management across business verticals.
The Company has strengthened its governance structures and refined standard operating procedures to integrate both macroeconomic risks and granular operational exposures. This includes risks emerging from geopolitical shifts, climate impact, supply chain vulnerabilities or any rapid technological changes. With cross-functional involvement, our risk management function is now embedded into every level of decision-making from Board-level oversight to frontline execution ensuring responsiveness and agility. Periodic audits, digital dashboards and robust internal controls enhance our visibility into emerging risks while enabling timely course correction.
We remain committed to cultivating a risk-intelligent culture that prioritizes transparency, accountability, and continuous improvement, thereby equipping the organization to navigate volatility and seize strategic opportunities with confidence.
| Key Risk | Risk Mitigation Framework |
| Feedstock Availability | The Company has established a diversified and resilient feedstock strategy supported by long-term strategic sourcing arrangements, multi-feedstock processing capabilities and integrated supply chain management. Continued investments in flexible dual-feed technologies enable optimisation across grain and sugar-based feedstocks, enhancing operational agility, supply security and long-term cost competitiveness. |
| Regulatory & Policy Risk | The Company proactively monitors the evolving regulatory and policy landscape through continuous stakeholder engagement, industry participation and strong governance practices. A flexible business model, disciplined compliance framework and scenario-based planning enable timely adaptation to policy developments while safeguarding long-term strategic objectives. |
| Environmental & Sustainability Compliance | Sustainability is embedded within the Companys operating philosophy through investments in resource-efficient manufacturing, zero liquid discharge systems, renewable energy integration, circular economy initiatives and advanced environmental management practices. This enables compliance with evolving environmental regulations while strengthening operational resilience and longterm sustainability performance. |
| Climate Change & Energy Transition | The Company integrates climate resilience into its business strategy through sustainable resource management, diversified feedstock sourcing, low-carbon technologies and business continuity planning. Continuous investments in renewable fuels and energy transition opportunities enhance resilience to both physical and transition climate risks while supporting Indias decarbonisation agenda. |
| Technology & Innovation | Continuous investments in advanced manufacturing technologies, digitalisation, automation and process optimisation enable the Company to maintain operational excellence and technological leadership. Strategic investments in next-generation biofuels, Sustainable Aviation Fuel (SAF), bio-based chemicals and future energy solutions position the Company to capitalise on emerging market opportunities. |
| Cybersecurity & Digital Resilience | The Company maintains a robust enterprise-wide cybersecurity framework supported by secure digital infrastructure, continuous monitoring, data protection protocols, disaster recovery systems and business continuity planning. Regular security assessments and employee awareness programmes strengthen resilience against evolving cyber threats and operational disruptions. |
| Financial & Liquidity Risk | The Company follows a prudent financial risk management framework focused on disciplined capital allocation, liquidity management and robust internal controls. Long-term commercial relationships with Oil Marketing Companies (OMCs), diversified revenue streams and strong credit risk management support stable cash flows and preserve financial resilience across business cycles. |
| Project Execution & Growth | The Company adopts a disciplined project governance framework for capacity expansion and strategic investments. Robust planning, technology partnerships, experienced execution capabilities and continuous monitoring support timely project delivery while effectively managing execution, cost and operational risks. |
| Key Risk | Risk Mitigation Framework |
| Human Capital | The Company views human capital as a strategic differentiator. A strong focus on talent acquisition, leadership development, capability building, employee engagement and workplace safety supports the creation of a high-performing, future-ready workforce aligned with the Companys long-term growth aspirations. |
| Market & Business Transformation | The Company continuously evaluates emerging opportunities across biofuels, Sustainable Aviation Fuel (SAF), compressed biogas, green hydrogen and biobased chemicals. A diversified portfolio, innovation-led growth strategy and disciplined capital deployment enhance long-term competitiveness while reducing concentration risk and positioning the Company to benefit from the global energy transition. |
Cautionary Statement
This document contains certain statements concerning the Companys future business prospects, growth strategy, industry outlook, financial performance, business plans, and other matters that may constitute forward-looking statements within the meaning of applicable securities laws and regulations.
These forward-looking statements are based on managements current expectations, assumptions, estimates, and projections regarding future events and are subject to various risks, uncertainties, and other factors, many of which are beyond the Companys control. Actual results, performance, or achievements may differ materially from those expressed or implied in these forward-looking statements due to a variety of factors, including changes in economic conditions, government policies, regulatory developments, industry trends, market conditions, competitive dynamics, technological changes, and other risks and uncertainties.
The forward-looking statements contained herein are made only as of the date of this document. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, except as may be required under applicable law or applicable regulatory requirements.
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