Gajendra Singh Godara
Aug 25, 2025
8
mins read
Ethanol (C₂H₅OH) is a renewable, flammable biofuel alcohol produced by fermenting sugars or starches (from crops like sugarcane, corn, rice) or via petrochemical processes (ethylene hydration) It is 99.9% pure alcohol and blends readily with petrol due to chemical miscibility. Ethanol has a high octane rating (improving engine performance) but about 27% lower energy content than gasoline, which can slightly reduce mileage.
Ethanol Blending refers to mixing a percentage of ethanol with petrol to create a blended automotive fuel. For example, E10 fuel has 10% ethanol and 90% petrol, and E20 has 20% ethanol. These blends can be used in standard petrol engines up to certain limits. Blended ethanol burns more cleanly than pure petrol, reducing emissions of carbon monoxide and hydrocarbons. India promotes ethanol blending to reduce dependence on imported crude oil, cut tailpipe pollution, and boost farmer incomes by creating demand for biofuel crops.
India has recently achieved 20% ethanol blending in petrol (E20 fuel) in 2025, five years ahead of the original 2030 target, marking a major clean energy milestone.
This rapid progress underscores the country’s commitment to energy security, rural income enhancement, and environmental sustainability.
The accomplishment has sparked discussions on its economic and environmental impacts, and on balancing biofuels with India’s long-term transition to electric mobility.
Table of content
Ethanol Blended Petrol (EBP) Programme, 2003
Launched in 9 states as a pilot targeting 5% ethanol blending to reduce crude oil imports and support farmers.
It expanded nationwide under the Ministry of Petroleum and Natural Gas as a nodal agency.
By 2014, blending levels remained low (~1.5%).
National Policy on Biofuels (NPB) 2018
Provided a comprehensive framework for ethanol blending in India.
Set a 20% ethanol blending target by 2030.
Allowed multiple feedstocks: sugarcane juice, molasses, surplus food grains, agricultural residues, used cooking oil.
Classified biofuels into 1G (food-crop ethanol), 2G (non-food biomass ethanol), 3G (algae-based biofuels).
Established the National Biofuel Coordination Committee (NBCC) to monitor blending and feedstock allocation.
Target Advancement (2021–22)
In June 2021, E20 target advanced to 2025 (from 2030).
Released inter-ministerial “Ethanol Roadmap” and launched E100 pilot in Pune.
Achieved 10% ethanol blending in 2022, ahead of schedule.
Amended NPB (2022) to formally advance 20% ethanol blending deadline to 2025-26, including newer feedstocks like damaged grains.
Pradhan Mantri JI-VAN Yojana (2019)
Supports 2G ethanol projects using cellulosic biomass & waste.
Provides viability gap funding for 2G bio-refineries (using stubble, bamboo, residues).
Extended till 2026-27 to promote advanced ethanol technologies.
Other Initiatives
Reduced GST on ethanol from 18% → 5%.
Interest Subvention Scheme: 6% subsidy on loans for new distilleries.
Amended Industries (Development & Regulation) Act, 1951 to ease interstate ethanol movement.
In 2023, India led the Global Biofuels Alliance (GBA) at G20 to foster international cooperation on sustainable biofuel.
Blending milestones
1.5% (ESY 2013‑14) → 5% (2019) → 10% (Jun 2022) → ~11.5% (ESY 2022‑23) → 14.6% (2023‑24) → around E20 in early 2025, with full E20 rollout targeted across fuel stations by 2025.
Future Targets
Under the amended National Biofuel Policy, India aims for E30 (30% ethanol blending target) by 2030.
Policymakers are exploring higher blends (E30) in the long term.
Expansion requires increased feedstock supply, ethanol production in India, and vehicle compatibility.
Path ahead must balance energy security, food security, and ecological sustainability.
Diversification of Feedstocks
India has moved beyond traditional sugarcane molasses to broaden ethanol production.
Aim: meet rising ethanol blending targets while safeguarding food security.
1. Molasses (Cane By-product)
C-Heavy Molasses: ~40% fermentable sugars; yields ~220–225 L ethanol/tonne.
B-Heavy Molasses: Higher diversion; ~290–320 L ethanol/tonne.
Sugarcane Juice/Syrup: Direct fermentation; ~80 L ethanol/tonne cane.
Contribution: By 2021-22, 45% of ethanol from molasses and ~8% from cane juice.
Concerns: Over-reliance → monoculture, water stress in cane-growing regions.
2. Grain-Based Ethanol
Sources: Maize (corn) and surplus rice (including FCI stocks).
Growth:
2017-18: Virtually 0% share.
2021-22: 16.7% share.
2022-23: 27% share.
2023-24: First time >50% of ethanol from grains (52.7% from maize + broken rice, ~401 crore L).
Advantages: Year-round production (unlike seasonal cane).
Challenges: “Food vs fuel” concerns; India imported maize in 2024 due to ethanol demand.
3. Other Feedstocks
Damaged wheat, barley, sorghum, millet, sweet sorghum, sugar beet, fruit pomace, agro-waste.
FCI allocated 5.2 million tonnes of rice for ethanol (2024-25).
By-products: Spent grain, bagasse → circular economy benefits.
4. Second-Generation (2G) Sources
Feedstocks: Cellulosic biomass, crop residues, municipal solid waste.
Example: Panipat refinery (2022) → ethanol from paddy straw, tackling stubble burning.
Policy Support: Pradhan Mantri JI-VAN Yojana (viability gap funding).
Status: Nascent; only a few plants due to high cost, technical challenges.
5. Third-Generation (3G) & Advanced Biofuels
Sources: Algae, microbes, novel biochemical routes.
Stage: Still R&D globally.
Support: Global Biofuel Alliance (GBA) for tech transfer.
Vision: Mix of 1G, 2G, 3G ethanol for a waste-to-wealth strategy.
Oil Marketing Companies (OMCs)
Public sector OMCs – IOC, BPCL, HPCL – procure ethanol through government-set tenders.
Signed long-term offtake agreements with distilleries → investment confidence.
Blending infrastructure (tanks, pumps) installed at depots.
By 2023: ~95% of petrol stations supplied E10, select outlets piloting E20 fuel.
Goal: Pan-India E20 availability by 2025.
Pricing Mechanism
Administered Price Mechanism (APM): Ethanol prices fixed annually, differentiated by feedstock.
Higher rates for ethanol from B-heavy molasses, cane juice, surplus rice, maize.
Ensures remunerative MSP for farmers and steady feedstock flow.
Financial Support & Incentives
Ethanol Interest Subvention Scheme (2018–22): 6% loan subsidy for new distilleries; >200 projects benefitted.
GST reduced: 18% → 5% on ethanol for blending.
Excise duty waivers, state-level tax breaks.
Ethanol declared a priority sector for lending.
Regulatory Easing
Amendments to IDR Act, 1951 eased interstate ethanol movement.
The programme was upgraded to a National Mission under NBCC.
Ethanol Supply Year (ESY): December–November cycle introduced for uniform procurement.
Infrastructure & Logistics
Transport mainly via rail & road tankers; ethanol pipelines planned in cane belts.
Rural depots need upgrades for automated blending.
Government exploring Ethanol Blending Corridors under National Logistics Policy 2022.
Quality control: OMCs test ethanol purity; pumps must display blend level (E10/E20).
Monitoring & Governance
OMCs report blending monthly; 12% average in 2022-23, varied by state.
Phased E20 rollout – 15 cities in 2023, expanding nationwide by 2025.
Continuous review by NITI Aayog & MoPNG to address bottlenecks.
Engine compatibility
Older vehicles: Many two‑wheelers and cars made before 2023 were designed for E10 fuel (10% ethanol + 90% petrol). Because ethanol can act like a solvent, it may wear out some rubber, plastic, and metal parts faster. So older vehicles can see slightly higher maintenance and a small drop in efficiency.
New rules: From April 2023, all new vehicles are designed to be E20‑compatible (20% ethanol + 80% petrol). From April 2025, Bharat Stage‑VI vehicles must fully meet E20 emission standards. Automakers have upgraded fuel pumps, hoses, seals, and engine calibration, and new models carry “E20” labels.
Mileage & Performance
E20 fuel (20% ethanol + 80% petrol) has less energy than normal petrol. So, in vehicles tuned for E10, mileage can fall a little—typically about 3–6% in most cases, and up to around 7% in some older models. New E20‑ready engines usually see a smaller drop.
Pick‑up may feel slightly softer on non‑E20‑ready vehicles. Keeping tyre pressure right, gentle acceleration, and timely servicing help. Modern engines with electronic fuel injection can be re‑tuned, which reduces the mileage loss.
Flex-Fuel Vehicles (FFVs)
Needed for higher blends (E85/E100).
FFVs run on any petrol-ethanol mix.
India encourages FFV prototypes (e.g. TVS scooter, Toyota car).
PLI incentives planned; FFVs could expand ethanol demand beyond E20.
Technological Modifications
Use of ethanol-resistant materials (fluoropolymer seals, stainless steel fuel rails).
Adjusted compression ratios for ethanol’s high octane.
ECU updates & ethanol sensors detect blend % for real-time tuning..
Reduced Oil Import Bill & Energy Security
India imports ~85% of crude oil → high import dependency.
Ethanol blending displaces costly petroleum with domestically produced ethanol.
Since 2014: saved ₹1.4 lakh crore in foreign exchange.
2021-22 (10% blending): savings ≈ $4 billion (~₹30,000 crore).
E20 blending: projected savings $6–10 billion annually.
Enhances fuel security, shields the economy from global oil price shocks.
Boost to Farmers & Rural Economy
Demand for ethanol ensures remunerative prices for sugarcane, maize, grains.
Farmers have earned ~₹1 lakh crore from the blending programme since 2014.
In 2025 alone: OMC purchases are expected to pay farmers ₹40,000 crore.
Over 200 distilleries established rural jobs, industrialization in states like UP, Maharashtra, Bihar, Punjab.
Farmers as “Urja-daata” (energy providers) in addition to “Annadaata”.
Environmental Benefits
Cleaner combustion: E10–E20 reduces CO emissions by 20–30%, lowers hydrocarbons & particulate matter.
GHG cuts: sugarcane ethanol ~65% less, maize ethanol ~50% less vs petrol.
Avoided ~700 lakh tonnes CO₂ by 2025 (≈ planting 30 crore trees).
Virtually no sulfur → reduces SO₂ & benzene emissions.
Biodegradable → ethanol spills less harmful than petrol.
Circular Economy & Waste Utilization
Converts surplus food grains & agro-residues into ethanol.
Tackles stubble burning → rice/wheat straw to 2G ethanol.
By-products: DDGS (cattle feed), potash-rich ash (fertilizer).
Initiatives like RUCO convert waste cooking oil to biodiesel.
Supports India’s waste-to-wealth and bio-economy ecosystem.
Improved Fuel Quality & Engine Performance
Ethanol has higher octane (~108 RON) → reduces engine knocking.
Enhances efficiency of high-compression modern engines.
Can improve power output (5–10% blends) if tuned properly.
Ethanol dissolves deposits → cleaner injectors, longer engine life.
Strategic & Geopolitical Gains
Reduces leverage of oil-exporting nations.
Strengthens trade balance, currency stability.
India now among the largest ethanol markets globally.
Leadership in Global Biofuels Alliance (GBA) → standard-setting role.
Export potential in ethanol/technology to developing countries.
Aligned with Atmanirbhar Bharat, SDG 7 (clean energy), SDG 13 (climate action).
Energy security
India imports most of its crude oil, so ethanol blended petrol reduces reliance on imported crude oil and shields the economy from global price shocks.
Higher ethanol blending in petrol diversifies the fuel mix and improves resilience during supply disruptions.
Import substitution and forex savings
Replacing a slice of petrol with domestically produced ethanol cuts the crude oil import bill and conserves foreign exchange.
Achieving higher blending targets (like E20) delivers recurring annual savings that can be reinvested in infrastructure and rural supply chains.
Emissions and air quality
Ethanol blended fuels burn cleaner at the tailpipe, lowering carbon monoxide and hydrocarbon emissions and helping cities with air pollution.
With sustainable feedstocks and efficient plants, ethanol blending can also reduce net carbon dioxide emissions from transport.
Rural economy and farmer incomes
Stable demand from oil marketing companies creates a steady market for sugarcane, maize, and surplus grains, supporting ethanol producers and farmers.
Payments to sugar mills/distilleries help clear farmer dues, while new distillery capacity generates local jobs and value addition.
Job creation and industry growth
Expanding ethanol production, storage, and logistics creates employment across distilleries, transport, and agri‑sourcing.
Growth in grain‑based and second‑generation ethanol (from crop residues) broadens the industrial base and supports Make in India.
Food vs Fuel Dilemma
Heavy reliance on sugarcane, maize, rice (first-generation feedstocks).
2023: Govt. banned sugarcane syrup ethanol due to sugar shortage.
2024: 34% maize diverted to ethanol, forcing corn imports.
Surplus definition is tricky during bad monsoons or crop failures.
Requires buffer stock management and NBCC regulation of feedstock use.
High Water Footprint
Sugarcane ethanol: needs 2,000–3,000 L water per 1 L ethanol.
Grain-based ethanol plants use 8–12 L water/L ethanol in processing.
E20 target → 7.1 M ha land (~3% gross cropped area).
Distilleries generate 10–15 L wastewater per L ethanol; risks pollution if untreated.
Calls for irrigation efficiency, drought-tolerant feedstocks, strict effluent norms.
Environmental Trade-offs
Monoculture crops → deforestation, biodiversity loss, soil degradation.
Life-cycle emissions: corn ethanol’s GHG cuts modest when accounting for fertilizer & land-use change.
Risks: ozone formation (evaporative emissions), acetaldehyde release.
Distilleries = Red category industries → air & water pollution if norms ignored.
Infrastructure & Logistical Constraints
Limited ethanol pipelines, reliance on costly trucks/rail.
Corrosive nature needs airtight tanks, upgraded pumps.
~70,000 pumps need upgrades for E20/E100 rollout.
Safety: flammable handling risks.
Vehicle & Consumer Concerns
E20 fuel → 5–7% mileage drop in E10-calibrated vehicles.
Warranty concerns for old vehicles.
Cold-start issues in winters; consumer resistance persists.
NITI Aayog suggested tax breaks on E20 to boost acceptance.
Feedstock Supply & Price Volatility
E20 needs ~1,000 Cr L ethanol annually (~45–50 MT sugarcane or grains).
Climate shocks (droughts, floods) risk shortages.
Land competition between food vs ethanol crops.
EV Transition Consideration
Risk of lock-in effect: ethanol infra may slow EV adoption.
EVs yield higher long-term emission cuts vs ethanol.
Policy must ensure ethanol acts as a bridge fuel, not competitor.
Diversify Feedstock & Strengthen Supply
Reduce over-dependence on sugarcane and grains; scale up 2G ethanol plants using crop residues, bagasse, and municipal waste.
Encourage cultivation of low-water crops (sweet sorghum, cassava, sugar beet) on marginal lands.
Ensure dynamic feedstock allocation via NBCC; cap use of food grains during shortages.
Support crop-switching in water-stressed regions, compensating farmers to prevent overuse of sugarcane.
Boost Ethanol Producers & Reduce Imports
Expand financial support for ethanol producers through subsidies and assured offtake.
Focus on self-reliance to reduce the need for ethanol imports.
Incentivize innovation in waste-to-fuel technologies, algae-based and 3G ethanol.
Enhance Water & Environmental Sustainability
Mandatory water audits and adoption of drip/micro-irrigation.
Enforce Zero Liquid Discharge (ZLD) norms to manage distillery effluents.
Introduce lifecycle GHG accounting and carbon-credit incentives for greener ethanol plants.
Technology & Automobile Readiness
Mandate Flex-Fuel Vehicles (FFVs); provide GST concessions for automobile manufacturers producing FFV or hybrid models.
Encourage Indian automobile manufacturers to develop engines tuned for higher ethanol blends.
Standardize corrosion inhibitors and additives in E20 fuel to maintain performance.
Policy & Consumer Measures
Price E20 slightly lower than E10 to stabilize petrol prices and increase consumer acceptance.
Conduct awareness campaigns to dispel myths on mileage loss and engine safety.
Establish an independent regulator (PNGRB) for monitoring fuel quality and blending standards.
Integration with India’s Energy Transition
Align India’s ethanol push with EV adoption, CNG, and hydrogen plans.
Keep ethanol blending flexible-E20 till 2030, reassess higher blends based on feedstock and technology.
Enhance international cooperation with Brazil, USA for standards and technology transfer.
Read more on Biofuels and Global cooperation: Global Biofuels Alliance, Objectives, Challenges, Types of Biofuels and Significance for India
Q. What is India’s current ethanol blending level?
A.India has achieved 20% ethanol blending (E20) in petrol ahead of the 2030 target.
Q. How does ethanol blending benefit the economy?
A.It reduces crude oil imports, saves foreign exchange, and boosts farmer income through steady ethanol demand.
Q. What are the environmental benefits of ethanol blending?
A.It cuts CO₂ emissions, lowers air pollutants, reduces stubble burning, and supports India’s climate goals.
Q. How are consumers reacting to E20 fuel?
A.Concerns remain about mileage loss, engine wear, and fuel costs; the government is considering incentives and awareness drives.
Q. Will ethanol blending affect India’s EV push?
A.Ethanol is a bridge fuel, complementing EV adoption while supporting immediate emission reduction in petrol vehicles.
Q. Given below are the names of four energy crops. Which one of them can be cultivated for ethanol? (2010)
Jatropha
Maize
Pongamia
Sunflower
Ans: (b)
Q. According to India’s National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels? (2020)
Cassava
Damaged wheat grains
Groundnut seeds
Horse gram
Rotten potatoes
Sugar beet
Select the correct answer using the code given below:
(a) 1, 2, 5 and 6 only
(b) 1, 3, 4 and 6 only
(c) 2, 3, 4 and 5 only
(d) 1, 2, 3, 4, 5 and 6
Ans: (a)
India’s early achievement of the E20 ethanol-blending target marks a notable pivot towards cleaner and more self-reliant energy. The ethanol blending programme has demonstrated win-win outcomes – cutting oil imports, empowering farmers, and reducing carbon emissions. However, as India pushes beyond 20%, it must proceed with strategic foresight. This includes diversifying feedstocks (to avoid food security conflicts), safeguarding water resources, upgrading vehicle and fuel infrastructure, and aligning the biofuel roadmap with climate goals. In essence, ethanol can be a powerful enabler of India’s energy transition if guided by prudent policies and sustainability safeguards.
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