Kathmandu: The government has formally introduced a policy allowing ethanol to be blended with petrol, aiming to reduce Nepal’s growing dependence on imported petroleum while promoting industries based on domestic raw materials.
The move has been legalized through the publication of the “Ethanol Blending in Petrol Order, 2082” in the Nepal Gazette last Friday by the Ministry of Industry, Commerce and Supplies.
The policy is being seen as a potential breakthrough in Nepal’s energy sector. By replacing a portion of imported petrol with domestically produced ethanol, the government hopes to ease pressure on foreign currency reserves while creating jobs and opening new opportunities to utilize agricultural residues that would otherwise go to waste.
Officials believe the initiative could lay a strong foundation for greater energy self-reliance. If implemented effectively, the policy could transform agricultural by-products into valuable industrial inputs and gradually reduce Nepal’s dependence on imported fossil fuels, while simultaneously stimulating growth in both the agricultural and industrial sectors.
Under the new order, ethanol producers will not be allowed to sell their product on the open market. Instead, all ethanol produced must be sold exclusively to the Nepal Oil Corporation, which will blend it with petrol before distributing the fuel across the country.
The regulation permits petrol sold by the state-owned oil company to contain up to 10 percent ethanol. However, the government has reserved the authority to adjust this ratio in the future if necessary. Responsibility for maintaining quality standards will be shared between ethanol producers and the oil corporation, with technical specifications to be set by the Department of Standards and Metrology.
Strict quality requirements have also been introduced. Ethanol must be produced in an anhydrous form, meaning it contains no water, and every tanker shipment will undergo quality testing before the Nepal Oil Corporation accepts it.
The government has also placed strong emphasis on food security while defining the raw materials allowed for ethanol production. Grains that are normally consumed as food will not be permitted for ethanol manufacturing.
Approved sources for ethanol production include molasses produced by sugar mills, Napier grass and other unused agricultural or forest biomass, agricultural residues such as corn cobs, straw and wheat husk, as well as rotten or food-grade-unfit grains and cassava. Yeast and other fermentation chemicals required for the production process will also be used in ethanol manufacturing.
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