Page 54 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

6. Ministry of Petroleum and Natural Gas approves Rs 150 Cr assistance for India's first private hybrid
2G ethanol project in UP

In a significant step towards India's circular bioeconomy, the Ministry of Petroleum and Natural Gas
(MoPNG), under the PM JI-VAN Yojana, has approved financial assistance of Rs 150 crore for India's first
private-sector Hybrid 2G Ethanol Project in Uttar Pradesh. The project is designed to produce sustainable
second-generation (2G) ethanol from sugarcane bagasse and other agricultural residues, creating a
pathway to convert agricultural waste into clean transportation fuel.

As India advances its ethanol blending programme, the focus is shifting towards feedstocks that do not
compete with food production. While conventional ethanol is largely produced from sugar and grain-
based feedstocks, next-generation biofuel technologies enable the use of agricultural residues such as
bagasse, crop stalks and other biomass wastes that are often underutilized or openly burned. The 91 KLPD
integrated biorefinery will utilize agricultural residues as its primary feedstock and demonstrate an
innovative waste-to-fuel pathway built on three complementary technologies.

The process begins with agricultural residues such as sugarcane bagasse. Using Ankur Scientific's biomass
gasification technology, the biomass is converted into clean synthesis gas (syngas), a mixture of carbon
monoxide, hydrogen and carbon dioxide. This syngas then becomes the feedstock for LanzaTech's
proprietary gas fermentation platform, where naturally occurring microorganisms convert the gaseous
carbon into ethanol. Unlike conventional ethanol production that relies on sugars or starches, this
approach enables the production of ethanol from biomass residues that would otherwise have limited
economic value.

The project brings together the expertise of Spray Engineering Devices Limited (SED), which is responsible
for engineering, development and execution of the integrated biorefinery; Ankur Scientific Energy
Technologies, which provides the biomass-to-syngas conversion platform; and LanzaTech, whose gas
fermentation technology converts syngas into sustainable ethanol.

Ankur Jain, Managing Director, Ankur Scientific, said in a statement, "India's agricultural sector generates
vast quantities of biomass residues every year. The challenge is not the availability of biomass, but the
ability to efficiently convert it into valuable products. Gasification enables us to transform agricultural
waste such as bagasse into clean syngas, creating the foundation for next-generation fuels. By integrating
biomass gasification with advanced gas fermentation technologies, projects such as this demonstrate how
agricultural residues can become an important source of sustainable ethanol without competing with food
resources. This represents an important step towards building a circular bioeconomy powered by
indigenous innovation.

Beyond ethanol production, the project highlights the potential of agricultural residues as a strategic
resource for India's energy transition. As the country explores higher ethanol blending levels and seeks to
strengthen energy security, technologies capable of converting waste biomass into fuels, chemicals and
other low-carbon products are expected to play an important role.

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