Biofuel Diplomacy: India’s Next Export after UPI

“Creativity fuels sustainability, and sustainability repays us not in profit alone, but in the restoration of the planet we share.” 

India’s technological and environmental leadership continues to redefine global progress. The Unified Payments Interface (UPI), developed by the National Payments Corporation of India in 2016, stands as a symbol of India’s innovation in digital finance. With over 12 countries, including Bhutan (2021), Nepal (2022), Singapore (2023), and Thailand (2025), adopting UPI, the platform has transformed international transactions into seamless, secure, and instant exchanges. UPI reached a historic milestone with 20 billion transactions in August 2025, marking a 34% year-on-year increase and processing a total value of ₹24.85 lakh crore—demonstrating India’s growing influence in global digital infrastructure.

Parallelly, India is advancing toward a sustainable energy future through its ambitious ethanol blending and biofuel initiatives. Achieving 20% ethanol blending five years ahead of the 2030 target, India is fostering energy security, reducing carbon emissions, and empowering farmers through innovative resource utilization. With a production capacity exceeding 1500 crore liters and expanding toward 1700 crore liters, the nation is also preparing to emerge as a responsible exporter of sustainable fuels. Just as UPI helped the world transact cleanly, India’s biofuel revolution will help the world breathe cleanly, transforming innovation into sustainability and progress into planetary well-being.

Empowering Rural India 

Biofuels represent a transformative stride in India’s sustainable energy journey, democratizing clean energy production much like the JAM Trinity revolutionized financial inclusion. Derived from renewable organic matter, biofuels offer cleaner combustion, reduced greenhouse gas emissions, and improved air quality. India’s Ethanol Blending Programme (EBP) has achieved 20% blending five years ahead of its 2030 target, saving foreign exchange, reducing carbon emissions, and creating new income avenues for farmers. Complementary initiatives such as Compressed Biogas under the SATAT scheme, biodiesel from non-edible oils and used cooking oil, and emerging Sustainable Aviation Fuel (SAF) targets reflect India’s holistic approach to energy diversification and climate responsibility. 

Once associated primarily with distilleries producing spirits, ethanol now fuels India’s green mobility revolution, symbolizing a transition from social indulgence to environmental innovation. Distilleries have evolved into strategic hubs of sustainable production, converting agricultural residues, molasses, and waste into eco-friendly fuels that power vehicles and strengthen rural economies.

This evolution underscores India’s broader vision where creativity and sustainability intersect to transform challenges into opportunities. As UPI helped the world transact cleanly, India’s biofuel revolution is helping the world breathe cleanly propelling the nation toward a resilient, inclusive, and carbon-conscious future. 

How the Biofuel Model Worked for India?

India’s Ethanol Blending Programme (EBP) has emerged as a cornerstone of the nation’s clean energy transition, delivering tangible economic and environmental dividends. During the Ethanol Supply Year (ESY) 2022–2023, India achieved an average blending rate of 12.06%, substituting approximately 509 crore litres of petrol and saving over ₹24,300 crore in foreign exchange by reducing crude oil imports. The initiative also generated an estimated ₹19,300 crore in direct payments to farmers, reinforcing rural prosperity and creating new income streams through the supply of feedstock such as sugarcane and maize. Additionally, the program contributed to a significant net reduction of about 108 lakh metric tonnes of carbon dioxide emissions, strengthening India’s commitment to carbon neutrality.

Accelerating its roadmap, India achieved 20% blending (E20) by March 2025 five years ahead of schedule underlining its proactive approach toward sustainable mobility and energy security. The government’s forward-looking policies, including the promotion of second-generation biofuels and the launch of the Global Biofuels Alliance at COP 28, are catalyzing global cooperation in clean energy. With growing private investments, new distilleries, and nationwide expansion of E20 fuel outlets, India’s ethanol initiative stands as a global model of how innovation, environmental stewardship, and economic inclusivity can progress in unison.

Real-world impacts 

India’s growing emphasis on biofuels marks a pivotal step toward sustainable economic and environmental transformation. The increased adoption of biofuels could yield an impact equivalent to removing 5.68 million cars from Delhi’s streets for an entire year or planting approximately 439 million trees across 2,925 square kilometres, twice the size of Delhi.

The economic benefits are equally remarkable, including substantial savings in oil import expenditure, enhanced rural employment, and a steady rise in farmer incomes. Farmers are increasingly recognized not only as Annadatas (food providers) but also as Urjadaatas (energy providers), contributing to the nation’s energy independence. Biofuel initiatives are also fostering waste-to-energy solutions, land restoration, and reduced greenhouse gas emissions, collectively advancing India’s clean energy agenda and global climate commitments.

However, the path forward requires calibrated implementation. Challenges such as vehicle compatibility, mileage variations, and potential insurance constraints need systematic policy interventions. Additionally, careful management of land and water resources is essential to prevent food-versus-fuel conflicts and ensure sustainable cultivation. By prioritizing advanced biofuels, utilizing degraded lands, and adopting circular economy principles, India can harmonize its economic ambitions with ecological balance transforming biofuel development into a model of responsible, inclusive, and future-ready energy transition.

International Potential of Ethanol blending

The global biofuel landscape in 2024 and 2025 reflects a decisive shift toward sustainable energy leadership, with the United States, Brazil, and India emerging as pivotal contributors. The United States exported a record 1.91 billion gallons of ethanol to 80 countries in 2024, valued at $4.3 billion representing nearly 12% of its total production. Major importers included Canada, the United Kingdom, the European Union, India, and Colombia, driven by rising biofuel mandates, lower U.S. ethanol prices, and reduced global supply from Brazil.

Meanwhile, Brazil, the pioneer of sugarcane-based ethanol through its landmark Proálcool Program (1975), continues to serve as a global model for biofuel innovation and diplomacy. Its long-standing policies on mandatory ethanol blending, flex-fuel vehicle adoption, and technology transfer to nations across Africa and Latin America have cemented its leadership in renewable energy transformation.

India, aligning with this global momentum, has achieved a remarkable surplus ethanol production capacity of approximately 1,822 crore liters as of June 2025 an over fourfold rise in 11 years. Empowered by progressive government policies, grain and molasses-based feedstock expansion, and strong private participation, India has met its 20% blending target ahead of schedule. This surplus now positions the nation to explore ethanol exports, sustainable aviation fuel, and second-generation biofuel innovations fortifying India’s role in the global green energy transitions.