DGFT Updates Export Policy for Second Generation (2G) Ethanol

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Dated: 25.09.2025

DGFT Updates Export Policy for Second Generation (2G) Ethanol

The Government of India has taken a significant step towards promoting sustainable energy solutions by amending the export policy for Second Generation (2G) Ethanol. Through Notification No. 32/2025-26, dated September 24, 2025, the Directorate General of Foreign Trade (DGFT) has introduced additional policy conditions for the export of 2G Ethanol under ITC(HS) Code 22072000. This move aligns with India’s commitment to reducing greenhouse gas (GHG) emissions and fostering the use of renewable energy sources.

What is Second Generation (2G) Ethanol?

Second Generation (2G) Ethanol is a biofuel produced from cellulosic materials such as agricultural residues (e.g., rice and wheat straw, corn stover), forestry residues, industrial waste, and other renewable resources like grasses and algae. Unlike First Generation Ethanol, which is derived from food crops like sugarcane and corn, 2G Ethanol is made from non-food biomass, ensuring it does not compete with food crops for land use. It is recognized for its low carbon dioxide (CO2) emissions and high GHG reduction potential, making it a sustainable alternative to fossil fuels.

Key Highlights of the Notification

Export Policy Update: The export of 2G Ethanol has been categorized as “Restricted” under ITC(HS) Code 22072000. This means that exporters must meet specific conditions to obtain permission for export.
Additional Export Conditions:
- The ethanol must be produced from cellulosic materials such as bagasse, wood waste, agricultural residues, and other lignocellulosic feedstocks.
- It must meet the specifications outlined in IS 15464 (as amended from time to time).
- The export is permitted for both fuel and non-fuel purposes.
- Exporters are required to obtain a valid Export Authorization and feedstock certification from the relevant competent authority.
Sustainability Focus: The policy emphasizes the use of renewable resources and ensures that the production of 2G Ethanol does not compete with food crops for land use. This aligns with India’s broader goals of promoting sustainable energy and reducing its carbon footprint.

Implications of the Policy

The updated export policy is expected to have several positive impacts:

Boost to Renewable Energy Sector: By facilitating the export of 2G Ethanol, India can position itself as a global leader in sustainable biofuels.
Support for Farmers and Industries: The use of agricultural and forestry residues as feedstock can provide additional income streams for farmers and reduce waste.
Environmental Benefits: Promoting the production and export of low-carbon fuels like 2G Ethanol will contribute to India’s efforts to combat climate change.

Conclusion

The notification reflects India’s commitment to fostering a sustainable and environmentally friendly energy ecosystem. By regulating the export of 2G Ethanol and ensuring compliance with stringent standards, the government aims to balance economic growth with environmental responsibility. This policy update is a step forward in India’s journey towards achieving its renewable energy and climate goals.

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Source: DGFT

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