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Ethanol Blending in India

12.08.2025

 

Ethanol Blending in India

 

Context

On World Biofuel Day 2025 (10 August), India achieved 20% ethanol blending with petrol ahead of schedule, boosting energy security and climate goals, but raising concerns over engine wear, fuel efficiency, and consumer readiness.

 

About Ethanol

  • Definition: A renewable biofuel produced from biomass such as sugarcane, maize, rice, and other agricultural residues.
     
  • Role in Fuel: Acts as an oxygenate when mixed with petrol, improving combustion efficiency and reducing harmful emissions.
     
  • Blending Ratios: Common blends include E10 (10% ethanol) and E20 (20% ethanol). Higher blends like E85 are used in flex-fuel vehicles in some countries.
     

 

Flex-fuel vehicles

  1. Vehicles run on petrol or ethanol blends interchangeably.
     
  2. The engine adjusts automatically to varying ethanol-petrol ratios.
     
  3. Helps reduce crude oil dependence and carbon emissions.
     
  4. Supports use of locally produced biofuels.
     
  5. Common in Brazil, USA, Canada, and Sweden..
     

 

Ethanol Blending Programme (EBP) – Policy Journey

  • Launch: 2003, with an initial target of 5% blending.
     
  • E10 Target: Achieved in 2022.
     
  • E20 Target: Achieved in March 2025, ahead of schedule; blending rose from 1.53% in 2014 to 20% in 2025.
     
  • Future Target: E30 by 2030, using both food grains and second-generation (2G) bioethanol.
     
  • Implementing Body: Ministry of Petroleum and Natural Gas (MoPNG), with procurement handled by Oil Marketing Companies (OMCs).

Government Measures & Initiatives

1. Policy Framework

  • National Policy on Biofuels (2018, amended 2022): Expanded feedstock base beyond molasses to include sugarcane juice, maize, surplus rice from FCI, and damaged food grains.
     

2. Financial Incentives

  • Fixed ethanol pricing by OMCs for producer stability.
     
  • Interest subvention and capital support for setting up distilleries.
     
  • Reduced GST on ethanol for EBP from 18% to 5%.
     

3. Infrastructure & Technology

  • PM-JI-VAN Yojana: Promotes 2G ethanol from agri-waste like rice straw, helping reduce stubble burning.
     
  • Norms released for E20 vehicles; some OEMs now producing E20-compliant models.
     
  • Over 17,000 retail outlets now dispense E20 fuel; E100 pumps being deployed.
     

4. Global Cooperation

  • Global Biofuels Alliance (GBA): Led by India to harmonise global standards and foster collaboration in biofuels.
     

 

Benefits of Ethanol Blending

Benefit Area

Key Gains

Energy Security

Cuts crude oil imports, saving ₹1–1.5 lakh crore annually.

Environment

Reduces CO, hydrocarbons, particulate matter; lowers greenhouse gas emissions.

Agriculture

Generates new markets for sugarcane and surplus grains, boosting rural incomes.

Economy

Stabilises domestic fuel supply and reduces import expenditure.

 

Technical & Environmental Challenges

1. Engine & Vehicle Concerns

  • Ethanol is hygroscopic (absorbs moisture), leading to corrosion of metal parts and breakdown of plastic/rubber components.
     
  • Deposits loosened by ethanol can clog fuel systems.
     
  • Mileage Impact: E20 can cause a 6–7% drop in mileage for cars and 3–4% drop for two-wheelers (NITI Aayog–MoPNG report).
     
  • Cold-start problems and rough idling in higher blends, especially in older engines.
     

2. Limited Compatibility

  • Most Indian two-wheelers are tuned for E10; lack of flex-fuel vehicles or retrofit guidelines for E20+ in mass-market segments.
     

3. Infrastructure Gaps

  • Storage tanks, pipelines, and pumps in many fuel stations are not fully ethanol-compatible.
     

4. Feedstock & Sustainability Risks

  • Heavy reliance on sugarcane impacts water resources and may affect food security if 2G ethanol production is not scaled up.
     

 

Industry & Consumer Readiness

  • Automakers: Industry body SIAM calls for faster tech upgrades and clearer regulations.
     
  • Fuel Retailers: Need nationwide ethanol-compatible infrastructure.
     
  • Consumers: Lack of awareness on efficiency loss and potential maintenance needs.
     

 

Way Forward

  1. Vehicle Compatibility:
     
    • Establish clear certification norms and incentivise rollout of flex-fuel vehicles.
       
  2. Consumer Protection:
     
    • Consider GST rebates or mileage-linked incentives to offset increased per-km fuel costs from lower efficiency.
       
  3. Infrastructure Modernisation:
     
    • Upgrade pipelines, storage, and pumps to ethanol-resistant standards.
       
  4. Feedstock Diversification:
     
    • Prioritise 2G ethanol from agricultural residues to avoid food-versus-fuel conflicts.
       
  5. Public Awareness:
     
    • Educate consumers on E20 performance, maintenance, and environmental benefits.

Conclusion

India’s ethanol blending achievement is a major stride towards clean energy and reduced oil dependence. However, for it to remain a sustainable and widely accepted solution, technical readiness, consumer confidence, and infrastructure upgrades must move in parallel. Ethanol should be a green fuel that delivers on both climate commitments and public trust.

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