Nagpur: As India pushes to increase ethanol blending with petrol, important details have emerged about two older ethanol plants operated in Bihar by HPCL Biofuels Limited (HBL), a wholly owned subsidiary of Hindustan Petroleum Corporation Limited (HPCL). In response to information sought under the Right to Information Act by Nagpur-based RTI activist Sanjay Agrawal, HPCL Biofuels provided details on the capacity, feedstock and commissioning of its plants in Sugauli and Lauria.
Both plants were commissioned in December 2011. Each has a distillery capacity of 60 KLPD, a sugarcane-crushing capacity of 3,500 TCD and a 20 MW cogeneration capacity. Together, the plants have an installed ethanol capacity of 120 KLPD.
Project began with revival of closed sugar mills
HPCL acquired the Sugauli and Lauria mills as part of the Bihar government’s initiative to revive closed sugar mills. According to the company, HPCL Biofuels Limited was incorporated in October 2009 to develop integrated sugar, ethanol and cogeneration plants at the two locations.
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HPCL said old and dilapidated equipment was removed and modern plants were installed at both sites. The two plants began operations in December 2011. The company describes them as part of its backward-integration strategy for the country’s Ethanol Blending Programme.
Initial project cost was ₹727.88 crore
According to HPCL Biofuels’ initial annual report, the combined project cost of the two integrated projects was estimated at ₹727.88 crore. Both plants began commercial operations in FY2011-12, and the company recorded production of around 4,700 KL of ethanol during the initial crushing season.
The figure is significant because it shows that ethanol production was part of the company’s integrated sugar operations from the time the plants were commissioned.
Capacity at Sugauli and Lauria
According to HPCL Biofuels, both plants are based on nearly identical configurations.
Sugauli: Sugarcane crushing: 3,500 TCD; distillery: 60 KLPD; cogeneration: 20 MW.
Lauria: Sugarcane crushing: 3,500 TCD; distillery: 60 KLPD; cogeneration: 20 MW.
The two plants have a combined installed distillery capacity of 120 KLPD.
Plants can use sugarcane juice as well as molasses
In its RTI response, HPCL Biofuels identified molasses as the feedstock used for ethanol production at both plants.
However, according to the company’s official website, both distilleries were designed to use sugarcane juice as well as molasses as raw material. The company’s ethanol plants produce fuel-grade ethanol, which is sold to oil marketing companies for petrol blending.
According to the company, processes such as reducing spent wash, biogas generation and bio-composting are also used during production. The company claims to follow a zero-effluent-discharge model.
Why year-wise production data matters
Agrawal’s RTI request sought year-wise ethanol production figures from the commissioning of both plants. Instead of providing the complete year-wise data directly, HPCL Biofuels referred him to the relevant annual reports in its response.
The company’s annual reports nevertheless reveal some important figures.
In FY2024-25, the two plants together produced 11,153 KL of ethanol, including 6,114 KL from Sugauli and 5,039 KL from Lauria. During the same year, the two plants operated for approximately 114 and 111 days, respectively.
In FY2023-24, total ethanol production from the two plants was reported at 16,471 KL—6,114 KL from Sugauli and 5,039 KL from Lauria. The annual report also records cane crushing and sugar production figures for both plants during the same period.
This raises a key question in the RTI matter: how much actual annual production has been achieved against the combined installed capacity of 120 KLPD, and how has capacity utilisation changed from year to year?
However, directly comparing daily capacity with annual production would not be appropriate because these are integrated sugarcane-based plants, where the crushing season and number of operating days affect production.
Ethanol business continues in FY2025-26
According to a recent HPCL subsidiary disclosure, HPCL Biofuels recorded sales of 6,257 KL of B-heavy ethanol in FY2025-26. During the same period, the company also exported 38,191 MWh of co-generated power. HPCL has further stated that distillery expansion is under way to support grain-based feedstock.
This indicates that the company is seeking to expand the ethanol business at these nearly 15-year-old plants through feedstock diversification and distillery expansion.
Sugar and power are also part of the business
Both HPCL Biofuels plants are integrated facilities, meaning their business model does not depend solely on ethanol production.
Sugar production from sugarcane, ethanol manufacturing and power generation through cogeneration are all part of the same integrated setup.
In FY2024-25, the two plants together crushed more than 735,000 tonnes of sugarcane, produced around 65,470 tonnes of sugar and generated 56,483 MWh of power. Of this, 27,158 MWh was exported.
This aspect is important because looking at ethanol production only through distillery capacity does not present the full picture of the plants’ business model.
From the initial model to grain-based expansion
When HPCL launched the two plants, the objective was to integrate ethanol production with sugar operations and create backward integration for HPCL’s petrol-blending requirements. The company’s current information indicates that it is now also working on distillery expansion to accommodate grain-based feedstock.
In other words, HPCL Biofuels’ ethanol business has moved into a new phase over the past 15 years—from the plan initiated in 2009, to plants commissioned in 2011, and now to grain-based expansion.
Why the issue matters for India’s ethanol policy
The Indian government has taken several steps under the Ethanol Blending Programme to increase domestic ethanol production. These include allowing alternative feedstocks, changing the ethanol pricing mechanism and providing financial assistance to expand production capacity. The government has long set a target of increasing ethanol blending in petrol.
Against this backdrop, the gap between installed capacity and actual production at older integrated plants is not merely an operational issue for one company. It is also linked to the broader question of how much of the ethanol capacity created in the country is actually being utilised.
What could emerge from a further RTI request?
A review of HPCL Biofuels’ current response alongside its annual reports points to scope for further investigation on three levels.
First, the year-wise ethanol production of Sugauli and Lauria from 2011-12 to 2025-26.
Second, production compared with operating days each year, along with estimated capacity utilisation.
Third, the total capital expenditure incurred at both plants so far and the cost of the proposed distillery expansion.
In its current RTI response, the company referred to the annual reports for these detailed figures.
Based on the documents currently available, it is clear that HPCL Biofuels’ two integrated ethanol plants in Bihar have been operating for around 15 years, with a combined installed distillery capacity of 120 KLPD. The company is also expanding capacity in the direction of grain-based feedstock. However, the year-wise capacity-utilisation picture over this entire period will emerge only after a detailed analysis of the annual-report data.
