India's Ethanol Blended Petrol Programme aims to reduce crude oil imports, boost farmers' income, and reduce emissions. However, challenges like food versus fuel debate, water-intensive feedstock, and vehicle compatibility persist. Future success requires diversifying feedstocks and upgrading infrastructure.
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Picture Courtesy: THE HINDU
The Supreme Court dismissed a petition challenging the nationwide rollout of 20% ethanol-blended petrol (E20).
Ethanol-blended petrol is a fuel mixture combining ethanol, a renewable biofuel derived from sugarcane, maize, or other biomass, with petrol. For example, E20 contains 20% ethanol and 80% petrol.
Ethanol’s higher octane rating (108.5 vs petrol’s 84.4) enhances engine performance, while its renewable nature reduces greenhouse gas emissions.
Enhancing Energy Security: India imports over 87% of its crude oil needs, making it highly vulnerable to price volatility and geopolitical risks. As of June 2025, India saved about ₹1.4 lakh crore in foreign currency due to increased ethanol production.
Mitigating Carbon Emissions: Since 2014, the ethanol program has cut COâ‚‚ emissions by 544 lakh metric tonnes, aligns with India’s ambitious Net-Zero 2070 target.
Promoting Economic Growth: Increased demand for ethanol encourages investment in distilleries and agro-processing industries, creating jobs and reducing distress migration.
Diversification of Cropping Patterns: The program encourages a shift from water-intensive crops like rice and wheat to alternative feedstocks such as maize and sorghum.
Industrial Growth: India's ethanol push has created a lucrative market for private investment in biofuel infrastructure, attracting both domestic and foreign capital.
Strengthening Infrastructure: Higher ethanol blending necessitates advancements in vehicle technology and fuel distribution networks, align with National Green Mobility Strategy.
The Ethanol Blended Petrol (EBP) Programme was launched in 2003.
By July 2025, Oil Marketing Companies (OMCs) achieved an average blending of 19.05%.
National Policy on Biofuels permits a wide range of feedstocks, including sugarcane juice, B- and C-heavy molasses, broken rice, damaged grains, and corn.
An administered price mechanism for ethanol procurement under the EBP Programme ensures stable pricing for producers.
The GST rate for ethanol for the EBP Programme was lowered to 5%.
The government has mandated that all vehicles manufactured from April 1, 2025, must be E20 certified.
Pradhan Mantri JI-VAN (Jaiv Indhan - Vatavaran Anukool fasal awashesh Nivaran) Yojana provides financial support for establishing advanced commercial projects to produce second-generation (2G) ethanol from agricultural waste. The scheme was extended until 2028-29.
Water-Intensive Nature: Heavily reliant on sugarcane, exacerbating water stress, particularly in drought-prone regions like Maharashtra and Uttar Pradesh.
"Food versus Fuel" Debate: Increased ethanol demand diverts food grains like rice and maize for fuel, driving up food prices and impacting food security.
Limited Production Capacity: Production capacity (16 BL as of March 2025) and distribution infrastructure are still inadequate to uniformly meet the 20% blending target across all regions.
Vehicle Compatibility Challenges: India’s vehicle fleet is largely designed for E10 fuel, and transitioning to E20 and beyond requires modifications in engine design and fuel systems.
Financial Viability: Price fluctuations due to variable sugarcane and grain output, impacting industry profitability and investment stability.
Environmental Concerns: Production involves high water usage, deforestation, and industrial waste discharge, poses environmental risks, including water pollution and depletion of oxygen in aquatic ecosystems.
Heavy Dependence on Government Subsidies: Any policy reversal or reduction in financial support could make ethanol production economically unviable.
International Trade Barriers: The United States Trade Representative (USTR) has criticized India’s ban on ethanol imports for fuel use, identifying it as a "unfair trade practice" and a major trade barrier for American ethanol producers.
Expanding Feedstock Diversification
Promote alternative feedstocks such as maize, sorghum, bamboo, and agricultural waste to reduce over-reliance on sugarcane.
Strengthen the PM-JI-VAN Yojana with increased R&D funding for second-generation (2G) ethanol production.
Integrate schemes like PM-KISAN to offer financial incentives for farmers shifting to biofuel crops.
Adopt a decentralized ethanol production model with small-scale distilleries in rural areas to improve supply-chain efficiency and reduce transportation costs.
Link ethanol units with Farmer Producer Organizations (FPOs) to empower local farmers and enhance direct feedstock procurement.
Enhancing Vehicle Compatibility and Fuel Infrastructure
Complement the mandate for E20-compatible vehicles by 2025 with incentives for retrofitting older vehicles to avoid consumer backlash.
Collaborate with automobile manufacturers and IITs to develop cost-effective engine modifications.
Expand ethanol-dedicated fuel pumps across India, especially in non-sugarcane-producing states, to ensure uniform accessibility.
Mandate public transport systems to use ethanol-blended fuels, integrating the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme with biofuel policies for hybrid solutions.
Improving Pricing Stability and Market-Linked Procurement
Create a dynamic Ethanol Price Stabilization Fund to insulate producers from raw material price fluctuations.
Move towards a market-driven ethanol procurement mechanism, similar to the power sector’s Renewable Energy Certificates (REC), to encourage private sector participation.
Implement a carbon credit system linked to ethanol production to provide financial incentives for adopting green fuel.
Addressing Water Sustainability in Ethanol Production
Shift towards water-efficient biofuel crops through incentives under PM Krishi Sinchayee Yojana.
Promote drip irrigation and micro-irrigation systems for ethanol-linked crops.
Encourage ethanol plants to implement zero-liquid discharge (ZLD) systems to reduce industrial water pollution.
Integrate ethanol plants with wastewater treatment facilities, under initiatives like Namami Gange, to ensure responsible water usage.
Strengthening Governance Framework
Strengthen interstate ethanol transport regulations to prevent logistical disruptions and price disparities.
Link the EBP Programme with the National Green Hydrogen Mission to create a long-term clean fuel roadmap.
Mandate clear labeling of ethanol content at fuel pumps and launch campaigns on vehicle compatibility, enforced under the Consumer Protection Act, 2019.
Brazil (E27 Success): Brazil’s 27% ethanol blending (E27) since the 1970s, using sugarcane, offers a model.
United States (E10 Standard): The US mandates E10 with opt-in E15, ensuring consumer choice. Its Renewable Fuel Standard (RFS) incentivizes non-food feedstocks like corn stover, reducing food security risks. India can explore similar non-food feedstock policies.
European Union (E10 Dominance): The EU’s Renewable Energy Directive caps food-based biofuels at 7% to prioritize food security. India should consider similar caps to balance fuel and food needs.
India’s EBP Programme is a transformative step toward energy security, environmental sustainability, and rural prosperity. However, challenges like vehicle compatibility, food security, and water stress demand nuanced solutions. A phased rollout, robust consumer awareness, and investment in alternative feedstocks will ensure the E20 target by 2025 strengthens India’s energy future without compromising consumer or environmental interests.
Source: THE HINDU
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PRACTICE QUESTION Q. The "food versus fuel" debate is a significant challenge to India's ethanol blending ambitions.150 words |
The main sources are sugarcane molasses and maize, but the government is pushing for second-generation (2G) ethanol from agricultural waste.
It is the process of mixing anhydrous ethanol, a bio-alcohol, with petrol to create a cleaner and more sustainable fuel.
India has already achieved its E20 (20% ethanol-blended petrol) target in 2025, ahead of its initial 2030 deadline.
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