Beyond the Blend: Ethanol’s Expanding Role in Green Manufacturing

Industrial Update – Newsletter – June 2026

IMAP’s Industrials group brings you this monthly update with a focus on latest news, transactions and interesting snippets from the Industrials domain in India

Traditionally ethanol’s primary industrial identity in India was as a fuel additive, to meet govt blending targets. With the growth of ethanol production in India, it is increasingly being repositioned as the foundational feedstock for a broader green manufacturing economy, with high-value downstream products.

Sustainable Aviation Fuel (SAF): is among the most important emerging technology area. Via the Alcohol-to-Jet (ATJ) pathway, which converts Ethanol to Ethylene, followed by oligomerization & hydrogenation. The long chain alkanes created are then fractionally distilled to extract SAF. India has set phased SAF blending mandates

ATJ technology knowhow is held by global chemical giants – Axens, Honeywell UOP, Lummus, LanzaJet who are now partnering with Indian refiners & EPC cos to setup SAF lines. Key ongoing partnerships include:

Poly Lactic Acid (PLA)/ Bioplastics is another big opportunity area. Ethanol can be co-processed to produce lactic acid, a precursor to Polylactic Acid, a biodegradable polymer used in packaging, medical devices, and 3D printing. Balrampur Chini is investing ~₹2,850 crore in a PLA project in UP state partnering with Sulzer (Switzerland), Jacobs (USA), and Alpine Engineering GmbH (Austria).

Compressed Biogas (CBG) closes the loop. Modern integrated biorefineries combine ethanol fermentation with anaerobic digestion to upgrade residual methane into renewable natural gas. India had commissioned 100 CBG plants with 700 MT/day capacity as of March 2025, with mandatory CBG blending in city gas networks in India which started with 1% in FY25-26 and going up to 5% by FY28-29.

These new product categories enable what were once waste, to emerge as ancillary revenue streams for integrated biorefineries. While CBG is commercially proven and SAF and bioplastics remain at early-to-mid stages of development in India, the convergence of enforceable government mandates, a scalable sugar feedstock base, and committed private capital makes the downstream ethanol space one of the most structurally compelling green manufacturing opportunities of this decade. For investors, technology partners, and industrial conglomerates alike, the window to establish early positions in this rapidly evolving value chain is open and narrowing.

Some recent transactions

Recent News

• n RBI’s June MPC meet, it lowered the FY27 GDP growth rate (6.3%) by 0.3% and increased FY27 CPI inflation (5.1%) by 0.5% because of global energy prices & El-Nino impact, and repo rate remains same
• TVS Supply Chain Solutions and Italy-based ALA group to form a joint venture to build an integrated supply chain and logistics platform for the Indian aerospace and defence sectors
• Crude Oil prices slipped below $70/barrel, after Iran-US peace agreement signed on 19 June 2026 in Geneva, Switzerland
• India’s Manufacturing PMI rose to 55.0 in May-26 from 54.7 in Apr-26, a 3-month high driven by demand strength amid inflation pressures
• Amazon announced additional $13 Bn investment on top of $35 Bn announced in 2025, in India by 2030 to expand and support Cloud and AI infrastructure in India; 

IMAP Industrials Index & Valuation of sub-segments

Commodity Prices Index