Bihar's Ethanol Plant Closure Threatens 700 Jobs Amid Policy Shift
Fear and uncertainty have gripped hundreds of workers in Buxar, Bihar, after the chairman-cum-managing director (CMD) of the Bharat Plus Ethanol Plant, Ajay Singh, confirmed on Tuesday that the unit will be closed from Wednesday. This announcement has left families of at least 700 workers dependent on the plant in Nawanagar, Buxar, staring at the prospect of job loss and renewed migration.
Workers' Plight and Migration Fears
Pradeep Singh, an employee of the plant, expressed his distress, stating, "I lived in Gujarat for nearly 20 years. I was happy when I got a job in Bihar. How will my family survive now?" He added that if the unit shuts down, he would be forced to return to Gujarat or Mumbai in search of work, facing potential harassment from locals. "How long will the CMD keep paying us when the plant is shut?" he questioned, highlighting the financial insecurity.
Sujit Kumar Singh, a resident of Ara, shared a similar story, saying he previously worked in Madhya Pradesh. "When this plant started in Bihar, I was happy to get a job near home. I could spend time with my family. Now, due to wrong policies, this job may end, and I will have to go outside again," he lamented. Workers have demanded that the government ensure full lifting of the plant's ethanol production to allow them to continue working in Bihar.
Root Causes of the Crisis
The plant, built at a cost of Rs 200 crore in the Nawanagar industrial area of Buxar district, is hit due to reduced ethanol lifting by oil companies. This crisis has emerged following the government's new ethanol tender policy. Ajay Singh explained, "Orders for ethanol have dropped sharply, forcing the plant to operate at just 50% capacity. With storage tanks expected to fill up within two days, a shutdown is unavoidable."
If the plant closes, around 700 workers and employees will be directly affected, while nearly 2,000 people, including farmers and transport workers, depend on the plant for their livelihood. The plant produces 100 KLPD of grain-based ethanol and procures spoiled rice, rice bran, paddy husk, and maize from farmers, requiring around 250 tonnes of rice husk daily.
Industry and Policy Concerns
According to Kunal Kishore, secretary of the Bihar Ethanol Association, oil companies—Indian Oil, Bharat Petroleum, and Hindustan Petroleum—are the only buyers of ethanol in the country. He noted that ethanol is procured either from plants with long-term offtake agreements or from other plants if demand cannot be met. "Earlier, it was assured that plants with agreements would get priority if there was additional demand. That assurance now appears to have been violated," he stated.
Kishore emphasized, "Bihar's ethanol plants are facing an existential crisis. Despite creating capacity at the state and Centre's call, several dedicated plants are today being pushed towards shutdown due to inadequate offtake orders from OMCs. This not only threatens thousands of jobs and local agricultural linkages but also severely damages investor confidence in Bihar's industrial ecosystem." He added that the Karnataka High Court has upheld preferential allocation for dedicated ethanol plants under long-term offtake agreements, urging its implementation.
Plant production manager Pankaj Singh linked the issue to the 2025-26 ethanol tender, explaining, "Our plant has a 10-year long-term offtake agreement. But in the new tender, dedicated ethanol plants have been placed third in priority. Cooperative sugar mills have been given first priority." He stressed that without regular lifting of ethanol, wages could not be paid, as "We can pay workers only when our product is sold."
Background and Official Responses
The plant, located about 40 km from Buxar headquarters, was built on 20 acres of land of BIADA, completed in 2024, and inaugurated by Chief Minister Nitish Kumar on March 15, 2024. On December 8, during the CM's inspection, CMD Singh and workers had submitted a memorandum seeking support.
When contacted, Anurag Saraogi, executive director of Bharat Petroleum, declined to comment. Mrinal Singh, an official in the industry office of Buxar, said the matter was high-level and sensitive in nature and that he could not say anything.
This situation underscores the broader challenges facing Bihar's ethanol industry, with workers and industry leaders calling for immediate government intervention to prevent job losses and economic disruption in the region.
