India has rapidly expanded its ethanol production ecosystem over the past few years to support the country's blending programme, but the economics of producing ethanol remain structurally different from those of mature markets such as Brazil and the US. According to Krishna Mohan Puvvada, Regional President for the Middle East, India and Africa (MEIA) at Novonesis, the differences stem less from biotechnology itself and more from feedstock choices, plant scale, engineering maturity and decades of industrial evolution.
Speaking to Autocar Professional, Puvvada said India has established the agricultural base, policy support and production infrastructure needed to support higher ethanol blends beyond E20. In his view, the country's future ethanol requirements can be met without difficulty, but improving production economics will increasingly become the industry's next focus.
"Today, when we look at global markets, comparing Brazil, the US and India, Brazil is able to produce at the lowest cost, followed by America and then India," Puvvada said.
He said the comparison should not be interpreted as India lagging in technology. Rather, it reflects industries that have evolved under different conditions over several decades. As ethanol blending expands further, improvements in conversion efficiency, engineering and plant productivity will become increasingly important in determining competitiveness.
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Feedstock, Scale And Engineering Shape The Difference
According to Puvvada, the biggest distinction between India and the world's two largest ethanol producers begins with feedstock.
Brazil's ethanol industry is built primarily around sugarcane, while the US relies largely on corn. India, by comparison, uses a more diversified feedstock basket that includes rice, maize and damaged food grains, with agricultural residues expected to play a larger role in the years ahead.
"The choice of raw materials" remains one of the primary reasons why production economics differ across countries, he said.
The second major difference lies in industrial scale.
Unlike Brazil and the US, where ethanol production has evolved through large integrated facilities over decades, India's production landscape remains relatively fragmented, with many smaller plants. Larger facilities naturally benefit from economies of scale, while automation and robotics have become standard features in many US plants, he said.
Puvvada also pointed to differences in engineering philosophy.
"India operates through low CAPEX and high OPEX. So it is a very fundamental design issue," he said, adding that production economics depend not only on feedstock prices but also on plant design, operating efficiency and long-term engineering decisions.
Importantly, he does not believe biotechnology itself is where India trails mature ethanol markets.
"From an enzyme perspective and the adoption of modern biotechnology, all are at similar levels," he said, suggesting that India's opportunity lies more in scaling infrastructure and improving engineering than in catching up technologically.
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Efficiency Will Define The Next Phase Of Competitiveness
While biotechnology may not explain the current differences between countries, Puvvada argued that it will play an increasingly important role in narrowing them.
He said advances in yeast technology can improve ethanol yield by more than 2% from the same feedstock, while improvements in enzyme systems can deliver another 0.5-1% increase in conversion efficiency without major infrastructure changes. Larger engineering upgrades, he added, could push efficiencies even closer to levels achieved in Brazil and the US.
Although enzymes and yeast account for only a small share of production costs in first-generation ethanol plants—around 3-4% of conversion costs—he said even marginal improvements can materially affect profitability.
"Even a one percent drop will alter the balance sheet," he said, explaining that small efficiency gains become significant when applied across an entire production cycle.
The economics are different for second-generation ethanol.
According to Puvvada, enzymes currently account for roughly 20-30% of conversion costs in 2G ethanol plants. However, enzyme performance has improved significantly over the past two decades, while manufacturing costs have continued to decline, making the technology increasingly competitive. He expects costs to fall further as production volumes rise and technology matures, drawing parallels with the cost trajectories seen in industries such as semiconductors and solar energy.
Beyond process efficiency, Puvvada sees India's biomass availability as another structural advantage. He said the country generates around 350 million tonnes of agricultural residue annually, much of which remains underutilised and could support second-generation ethanol production in the coming years.
He also argued that discussions around 2G ethanol should not focus solely on production costs. Broader considerations such as greenhouse gas emissions, air quality, sustainability, energy security and India's long-term net-zero objectives should also be factored into evaluating the economics of advanced biofuels.
Looking ahead, Puvvada believes India's next gains will come not from simply producing more ethanol, but from producing it more efficiently. Feedstock optimisation, larger plants, improved engineering and continued advances in biotechnology, he said, will together determine how closely India's production economics can converge with those of Brazil and the US.