Ethanol tender order likely to hit 350 producers

Ethanol producers have raised concerns on the recent ethanol tender order for the 2025-2026 ethanol supply year that reportedly favours new entrants in deficit zones.

The published allocations indicate that at least 350 distilleries are deprived of adequate procurement orders from Oil Marketing Companies (OMCs). Many of these units were set up with an understanding with OMCs or were part of earlier policy initiatives, according to the Grain Ethanol Manufacture’s Association (GEMA).

It said in a press release that according to the “Allocation Methodology and Criteria” in the tender document, “The zones where the offers from the distilleries located within the zone are less than the requirement of that zone, this has been considered as the deficit zone. For these zones, offers from the vendors shall be considered in full for allocation.”

While the policy appears to support local sourcing in deficit areas, it ignores surplus capacity promoted by the OMCs in neighbouring States. The allocation methodology bypasses distilleries that were established with understandings such as Long-Term Offtake Agreements and Expression of Interest.

C. K. Jain, president of GEMA said, “A more holistic procurement model is needed – one that considers surplus availability across States, pre-existing capacities, and investments, prior understandings and commitments made with distilleries”.