The global grain game: Could India become the Brazil of ethanol

India stands on the cusp of a transformational moment in its energy and agricultural future. As it rapidly scales up ethanol production and blending, commentators and policymakers are asking a fundamental question: Can India become the Brazil of Ethanol in the global grain game? The answer can be an emphatic yes, but India needs to learn from Brazil’s successes, especially its policy initiatives and other support systems. For India, it presents a blueprint only up to 20% blending by 2025, but it needs to be drafted quickly with a futuristic approach for Indian conditions in terms of optimising the already built-up capacity, surplus feedstocks, and building a policy framework for a sustainable biofuels revolution.

Brazil's rise as an ethanol powerhouse began in the 1970s with the Proálcool programme, to wean the country away from volatile oil imports and create a domestic sugarcane-based ethanol industry as an alternative fuel for vehicles. The government set up regulatory frameworks, research institutions, and subsidies to spur large-scale ethanol production and develop ethanol-powered vehicles.

It also guaranteed purchase prices, subsidised infrastructure, incentivised ethanol-only vehicles, and mandated that fuelling stations offer ethanol alongside gasoline. Initially, ethanol was blended with gasoline at an initial 20% proportion (E20), but by the late 1970s and early 1980s, vehicles powered exclusively by hydrated ethanol fuel were launched.

The present policy in Brazil adopts base petrol blending at 27% and whereas entire replacement of petrol has reached 55% by introducing flexi fuel vehicles, dispensing 100% ethanol separately so that vehicle owners can have a choice depending upon cost economy.

Over decades, Brazil also built a comprehensive ecosystem—flex-fuel vehicle adoption, market-driven incentives, robust rural integration, and big environmental wins—that propelled it to become the world’s second-largest ethanol producer and a global exporter.

India’s blending programme

India's ethanol blending programme is much newer, only starting in earnest around 2003, with a dramatic push from 2014. The nation recently achieved 20% blending (E20), five years ahead of schedule, and has now set its sights on exports and achieving E27 blending. Ethanol production capacity has remarkably reached more than 1,800 crore litres annually, supporting both grain and sugarcane-based production. India’s ethanol push has already provided additional income of ₹10,75,80 crore to farmers out of ₹1.45 lakh crore to distillers in a decade, cutting sugarcane arrears and boosting rural prosperity.

Unlike Brazil, which leveraged its vast sugarcane production, India needs broad-based feedstocks through heavy investment in grain-based ethanol—maize, rice, and surplus food grains.

Flexible vehicle policy and consumer awareness

A crucial lesson from Brazil is vehicle flexibility. More than 85% of Brazilian new cars are flex-fuel vehicles (FFVs), seamlessly running on blends from E27 to pure ethanol. India

needs more FFV penetration. Accelerating the FFV rollout is possible today because auto companies like Honda, Maruti, Tata, etc. already have the prototypes, but need the backing of incentives and regulatory mandates.

A successful ethanol policy will need to ensure that automotive standards in India keep pace with rising ethanol blending targets, while simultaneously launching consumer campaigns across the country on the benefits of FFV usage.

Brazil’s successful ethanol programme can be attributed to the nationwide roll out ethanol pumps at gas stations and ethanol producing units nationwide fostering widespread consumer uptake. For India to replicate such success, it needs to create robust ethanol logistics system, including establishing pipelines for ethanol, dedicated tankers, and efficient rail networks. Other must-do projects include setting up unified tracking systems for blending, storage, and distribution to reduce bottlenecks.

Market incentives and export readiness

Brazil grew into a world exporter by letting market forces drive the expansion with strong mandates. A successful India strategy needs to shift incentives toward ethanol exports, also in line with global standards. Partnering with international agencies (US, EU, Brazil) for technical standards and access, too, would greatly help the cause of ethanol. As would entering into trade agreements with different countries, with policy support from the ministries of commerce and external affairs. Interlinking the ethanol policy with broader rural uplift programmes will also help sell the project to the nation at large.

Brazil succeeded by acting systemically, thereby successfully enduring oil shocks, sugar price volatility, and agricultural setbacks with dynamic blending mandates and flex-fuel innovation. The government aligned industry, agriculture, and consumer interests, making ethanol mainstream while cutting CO₂ emissions by 600 million tonnes in the past 20 years, till October 2022. The export strategy was enabled by consistent quality, international diplomacy, and environmental credibility.

India has followed with rapid scaling—already saving ₹1.44 lakh crore in foreign exchange and reducing millions of tonnes of CO₂ emissions. Strategic lessons include moving at a deliberate pace, expanding technological flexibility, and integrating export ambitions with sustainability.

The road ahead

In the next couple of years, India has the potential to become a “Brazil of Ethanol”—a global leader, if not exporter, of sustainable biofuels. Success will depend on ensuring long-term vision in policy, incentivising flex-fuel adoption, modernising ethanol infrastructure, and investing in innovations that serve both rural and urban India. By building on Brazil’s blueprint while embracing Indian diversity, India could reshape the global grain game for a sustainable, cleaner future and ensure its place on the world’s energy map.

(The author is President, Grain Ethanol Manufacturers Association, and chairman and managing director, Gulshan Polyols Limited. Views are personal.)