Under the Ethanol Blended Petrol (EBP) programme an additional 2.8 million tonnes of rice is to be provided at subsidised rates, aimed at reducing excess stockpiles of Food Corporation of India (FCI).

Significance 

• Energy security: Being a renewable sustainable fuel, it will reduce dependence on imported fossil fuels.
• Optimal utilization of excess buffer stocks: FCI has projected economic cost of rice (including minimum support price (MSP), storage, transportation etc.) at Rs 4173/quintal for 2025-26. 
  • Currently, FCI holds 61 MT of rice against a buffer of only 13.58 MT. 
• Economic: It promotes the "Make in India" initiative, contributing to doubling farmers' incomes and generating employment.

Challenges Regarding Ethanol Production from Food Staples

• Food Security vs. Energy Security: Use of food staples like sugarcane, corn and rice for ethanol production threatens food and livestock feed security due to threat of over-diversion.
  • Rice, along with sugarcane and maize, forms the backbone of India’s food and livestock feed systems, yet all three are being used as feedstocks for ethanol.
• Inflation: The increased demand of food crops for ethanol production increases the prices for consumers and may result in reduced availability.