Under the tender, suppliers can offer ethanol manufactured using maize, broken rice, surplus rice held by the FCI and C-heavy molasses, among other feedstocks.
Public sector oil marketing companies (OMCs) will not procure ethanol made from sugarcane juice, sugar syrup or B-heavy molasses for the 2026-27 supply year, following the Centre's instructions to eliminate the use of sugar for ethanol production. According to a PTI report, Bharat Petroleum Corporation Ltd (BPCL), which is conducting the procurement on behalf of state-run fuel retailers, has invited bids for approximately 11 billion litres of ethanol for the period from November 2026 to October 2027.
The procurement is intended to support the government's target of blending 20 per cent ethanol with petrol.
Under the tender, suppliers can offer ethanol manufactured using maize, broken rice, surplus rice held by the Food Corporation of India (FCI) and C-heavy molasses, among other permitted feedstocks.
"Govt of India has issued directions that sugar diversion for ethanol be reduced to zero for Ethanol Supply Year 2026-27. Thus, no offers have been sought for ethanol produced from sugarcane juice, sugar, sugar syrup and B-heavy molasses in this quantity bid tender," BPCL said in the tender document.
Notably, reports from August suggested that ethanol is putting pressure on food items such as eggs due to rising diversion of maize -- a key ingredient in poultry fee.
Explaining the procurement categories, the company said, "Accordingly, ethanol produced from different feedstocks, namely C-heavy molasses, damaged food grains, surplus rice procured from FCI, maize and other feedstocks as per the National Policy on Biofuels, have been provided as separate categories in the quantity bid," it added.
The decision comes as India's sugar production fell by around 11 per cent in the 2025-26 season, with output projected to decline further in the following sugar season, 2026-27.
Sugar availability in the domestic market has also remained tight. Mills diverted approximately 30 lakh tonnes of sugar towards ethanol manufacturing during the sugar season that concluded on September 30.
