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Bihar Becomes 1st State in India to implement ‘Ethanol Production Promotion Policy 2021’

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Bihar now first state in country to implement ethanol promotion policyBihar Cabinet has approved the state’s own Ethanol policy called ‘Ethanol Production Promotion Policy, 2021’.  The approval has made Bihar as the 1st State in India to implement Ethanol Promotion Policy under the National Policy of Biofuels, 2018.

  • Objective – To make Bihar an ethanol hub & as investors’ coveted destination.
  • The policy allows Bihar to directly make ethanol from Maize, Molasses, broken rice & rotten grains.

Highlights of the Policy

  • Investors will get a 15% Capital subsidy (maximum of INR 5 Crore).
  • Investors will also get exemption from Stamp duty, Registration and land conversion fees, electricity duty reimbursement and employment and skill development subsidy.
  • SC/ST, EBC, women, differently-abled or acid attack survivors investors to be given 15.75% subsidy up to a maximum of INR 5.25 Crore.
  • The policy gives importance on issuing licenses & clearances in a time-bound manner for new standalone ethanol units.
  • Through this policy, Bihar government aims to produce around 50 Crore litres of Ethanol each year.
  • Bihar Government  will allot land to ethanol investors from the 4,200 acre available with BIADA (Bihar Industrial Area Development Authority) and the industry department.

Financial Assistance to Manufacturing units

Under the policy, financial assistance will be provided to greenfield standalone manufacturing units producing fuel-grade ethanol & supplying 100% of their ethanol to oil manufacturing companies under the Centre’s ethanol blending programme.


  • At present, Bihar has been producing 12, 000 crore litre ethanol per year. It is the 5th highest ethanol-producing state in India (Top 4 are Uttar Pradesh, Maharashtra, Karnataka & Tamil Nadu).
  • At present, bioethanol blending in petrol in India stands at 6.2%, India has set a target of 20% Bioethanol blending of petrol by 2025 (the deadline has been moved from 2030 to 2025).

NITI Aayog’s Expert Committee 

  • NITI Aayog’s Expert Committee constituted by the Ministry of Petroleum and Natural Gas (MoPNG) submitted its report on Ethanol Blending
  • The report suggests a road map for 20% ethanol blending in petrol by 2025.
  • It also suggests year-wise targets for production & supply of ethanol;manufacture of compliant vehicles & regulatory simplification.

Recent Related News:

i.January 19, 2021, Department of Food & Public Distribution (DoFPD) has notified a modified scheme to extend financial assistance for producers of “1st Generation” (1G) Ethanol from feed stocks such as Cereals (rice, wheat, barley, corn & sorghum), Sugarcane & Sugar Beet.

About Bihar

Chief Minister – Nitish Kumar
Capital – Patna