In a significant boost for India’s biofuel sector, the Directorate General of Foreign Trade (DGFT) has updated export regulations to permit the shipment of second-generation (2G) ethanol with immediate effect, as notified on September 24, 2025. This eco-friendly biofuel, derived from non-food sources like bagasse, wood waste, and agricultural residues, aligns with India’s advanced Ethanol Blended Petrol (EBP) program, which achieved a 20% blending target five years ahead of schedule in July 2025. For biofuel producers, exporters, and sustainability advocates searching India 2G ethanol exports permitted, DGFT notification September 2025, or ethanol blending target achievement, the policy change—under ITC(HS) Code 22072000—requires valid export authorization and feedstock certification from competent authorities, ensuring compliance while opening doors to global markets. As Union Minister Pralhad Joshi urged producers to tap export potential at the India Sugar and Bio-Energy Conference 2025, this step supports energy security and rural development, with OMCs inviting bids for 1,050 crore liters of ethanol in ESY 2025-26.
The notification, adding an additional policy condition for 2G ethanol, comes amid surplus production capacity and a push for sustainable exports.
What is 2G Ethanol? A Green Biofuel from Non-Food Sources
Second-generation (2G) ethanol is produced from lignocellulosic feedstocks like agricultural residues (rice/wheat straw, corn stover), bagasse, wood waste, grasses, algae, and industrial residues—materials that don’t compete with food crops for land. It meets IS 15464 specifications for low CO2 emissions and high GHG reduction, making it an eco-friendly alternative to first-generation (1G) ethanol from sugarcane or grains.
- Production Process: Involves enzymatic hydrolysis and fermentation of cellulosic biomass, yielding sustainable fuel for blending or non-fuel uses.
- Environmental Edge: Reduces GHG by up to 90% vs. fossil fuels; supports circular economy from waste.
- Market Potential: With India’s 20% blending achieved early (July 2025), surplus enables exports to markets like Tanzania and Angola.
| Aspect | 1G Ethanol | 2G Ethanol |
|---|---|---|
| Feedstock | Food Crops (Sugarcane, Grains) | Non-Food Residues (Bagasse, Straw) |
| GHG Reduction | 30-40% | Up to 90% |
| Land Use | Competes with Food | Waste-Based, Sustainable |
| IS Standard | 15464 (Basic) | 15464 (Advanced) |
Export Conditions: Authorization and Certification Required
To ensure traceability and sustainability, exports under ITC(HS) Code 22072000 (ethyl alcohol and denatured spirits) require:
- Valid Export Authorisation: Issued by DGFT, verifying compliance.
- Feedstock Certificate: From a competent authority (e.g., OMCs or state bodies), confirming 2G origins and low emissions.
This prevents misuse of 1G ethanol and promotes genuine green exports, aligning with global sustainability standards.
Broader Impact: Accelerating Ethanol Blending and Exports
India’s EBP program, blending ethanol with petrol, achieved 20% by July 2025—five years early—thanks to expanded feedstock like 52 lakh MT surplus FCI rice and 40 lakh MT sugar diversion for ESY 2024-25/25-26. OMCs invited bids for 1,050 crore liters in ESY 2025-26, signaling surplus for exports.
- Economic Boost: Exports could add Rs 10,000-15,000 crore annually, per ISMA estimates.
- Rural Development: Supports 50 lakh farmers via maize clusters and residue utilization.
- Global Edge: Positions India as a green biofuel exporter, reducing oil imports by 10%.
| Initiative | Allocation (LMT) | Period | Impact |
|---|---|---|---|
| FCI Rice Diversion | 52 | ESY 2024-25 & 25-26 | Feedstock Surplus |
| Sugar Diversion | 40 | ESY 2024-25 | Blending Target Achieved |
Conclusion: 2G Ethanol’s Green Export Gateway
The DGFT’s permission for 2G ethanol exports opens a sustainable revenue stream, rewarding India’s early blending success. With certification ensuring eco-integrity, it’s a win for energy security and farmers. For biofuel stakeholders, the global market beckons—will exports hit Rs 15,000 crore by 2026? The notifications flow.
