The Government has been promoting ethanol blending with petrol through the Ethanol Blended Petrol (EBP) Programme. Under this initiative, ethanol blending has increased from 188.6 crore litres in 2018-19 to over 700 crore litres in 2023-24.
On December 03, 2024, The Ministry of Petroleum & Natural Gas announced that Ethanol blending in petrol has reached a record 14.6% in the Ethanol Supply Year (ESY) 2023-24, contributing to foreign exchange savings of ₹75,000 crore since 2018.
With this significant milestone, it is important to know key ethanol stocks and segments involved in ethanol production and distribution so you can make informed decisions.
Companies that produce ethanol from various feedstocks (like corn, sugarcane, or agricultural waste) directly benefit from increased ethanol blending mandates. These companies see increased demand for their product as blending levels rise.
Companies like Praj Industries, Shree Renuka Sugars, and EID Parry are key players in ethanol production, sourcing from agricultural waste, sugarcane, and other materials.
Ethanol is often produced as a byproduct of sugarcane or corn, meaning companies in the sugar or agriculture industry stand to benefit from higher demand for these raw materials.
Companies like Bajaj Hindusthan Sugar Ltd and Balrampur Chini Mills Ltd are prominent producers of sugar and ethanol, with operations in India and globally.
Public Sector Oil Marketing Companies (OMCs) involved in distributing blended fuel can see increased sales as the demand for ethanol-blended petrol grows.
Companies such as Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL), and Bharat Petroleum Corporation Limited (BPCL), play key roles in the distribution of ethanol-blended petrol.
Ethanol blending not only benefits companies across the production and distribution sectors but also plays a crucial role in driving economic growth and sustainability.
Over the last 3 years, as of September 30, 2024, the Ethanol Blended Petrol (EBP) programme has made remarkable contributions to India’s economy and sustainability efforts.
It facilitated the swift payment of approximately ₹57,552 crore to farmers, boosting the agricultural sector.
In addition, the programme led to significant foreign exchange savings of over ₹75,000 crore.
With nearly 110 lakh metric tonnes of crude oil substituted and a net reduction of around 332 lakh metric tonnes of CO2, the EBP initiative has proven to be a powerful tool in both economic growth and environmental preservation.
The rise of ethanol blending marks a significant step toward a more sustainable fuel future, benefiting key industry sectors from ethanol producers to oil and gas companies. As demand for ethanol-blended petrol continues to grow, opportunities are emerging for investors within these segments. However, it’s crucial to note that investing in these sectors should be approached with caution. Before making any investment decisions, it is strongly advised to consult a financial advisor to assess risks and ensure informed choices.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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