India's Supreme Court freezes ethanol allocation for 2025-26 as Centre denies calling E20 an 'experiment'
The Supreme Court on Tuesday ordered status quo on ethanol supply allocation for the 2025-26 Ethanol Supply Year. That stays a Karnataka High Court direction telling oil marketing companies to reconsider how much ethanol they buy from one dedicated distillery. The bench of Justices M M Sundresh and Sheel Nagu issued notice on a petition from Bharat Petroleum, which is fighting the June 16 order. Nothing gets reallocated until the court rules.
The same hearing set off an argument over a single word. Attorney General R Venkataramani was quoted telling the court that the 20% blending program "is still something the government is trying to experiment with," and that demand "may go down" from next October. Priyank Kharge seized on it, calling it an "ethanol experiment on 3.6 crore Indians." By evening the Ministry of Law and Justice said the reports were "completely false and do not reflect anything even close to the actual submissions" made in court. The Centre is now denying it called its own flagship fuel policy an experiment, after years of the oil ministry presenting E20 as settled.
Why the allocation fight matters
This is one distillery's quota, but the ruling sets the rule for who gets what in a supply year where the OMCs are the only buyers. If a court can force reallocation, any distillery that feels short-changed has a template to copy, and BPCL wants that closed off.
Soybean oil at a four-year high
US soybean oil is at its highest in more than four years this month, pushed by biodiesel demand tied to the Renewable Fuel Standard volumes for 2026 and 2027. Soybeans crossed $11 a bushel for the first time in two years. A new crush plant in Gilman, Illinois is running 300,000 bushels a day. The RFS mandate is pulling in feedstock and lifting farm prices, and new crush capacity is being built to meet it. Growers are happy about the price. Anyone buying soybean oil for food is paying more for it.
Transpetro orders ethanol-ready tankers
Petrobras' shipping arm, Transpetro, is spending $427 million on four MR1 product tankers at the Rio Grande yard in Brazil, built to carry ethanol along with other products. The order bets on Brazil moving more biofuel by sea, and it keeps a domestic shipyard busy.
What to watch
The main thing ahead is the Supreme Court hearing date, since status quo holds until the bench sets one. After that, keep an eye on whether soybean oil keeps climbing as the 2026 RFS volumes firm up, and whether that feeds through to RIN prices and renewable diesel margins over the summer.