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India's aim to cover entire nation with E20 fuel by 2025

Published: 27th Jul, 2023


Addressing the G20 Energy Ministerial meeting in Goa, Prime Minister Modi announced that India is going to commence the rollout of 20% ethanol-blended petrol this year and aims to cover the entire nation by 2025.

A quick recap

  • The Ethanol Blended Petrol Programme was launched in 2003 with an aim to promote the use of renewable and environmentally friendly fuels and reduce India’s import dependence for energy security.
  • Starting with 5% blending, the government has set a target of 10% ethanol blending by 2022 and 20% blending (E20) by 2030.
  • The programme is implemented in accordance with the National Policy on Biofuels.
  • Under this programme, oil marketing companies (OMCs) will procure ethanol from domestic sources at prices fixed by the government.
  • Till 2018, only sugarcane was used to derive ethanol. Now, the government has extended the ambit of the scheme to include food grains like maize, bajra, fruit and vegetable waste, etc. to produce ethanol.
  • This move helps farmers gain additional income by selling the extra produce and also broadens the base for ethanol production in the country.

National Policy on Biofuels:

  • India's Ministry of Petroleum and Natural Gas published its “National Policy on Biofuels" in 2018 and further amended it in June 2022.
  • The policy's objective is to reduce the import of petroleum products by fostering domestic biofuel production.
  • The recent amendment has changed the following, selected elements in the 2018 National Policy on Biofuels:
    • Advance the deadline to reach the blending target of 20% bioethanol in petrol, from 2030 to 2025-26.
    • Make additional feedstock eligible for the production of biofuels.
  • The policy supersedes India's 2009 National Biofuel Policy. Building on the amended National Policy on Biofuels, India published a "Roadmap for Ethanol Blending in India 2020-25".

What is Ethanol?

  • Ethanol is an organic chemical
  • It is a simple alcohol with the chemical formula C2H6O.
  • Its formula can be also written as CH3−CH2−OH or C2H5OH, an ethyl group linked to a hydroxyl group. Ethanol is a volatile, flammable, colourless liquid with a characteristic wine-like odour and pungent taste.
  • It is a psychoactive drug, recreational drug, and the active ingredient in alcoholic drinks.
  • Ethanol is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
  • It has medical applications as an antiseptic and disinfectant.
  • It is used as a chemical solvent and in the synthesis of organic compounds.
  • Ethanol is a fuel source. Ethanol also can be dehydrated and to make ethylene, an important chemical feedstock.

What is ethanol blending?

  • An ethanol blend is defined as a blended motor fuel containing ethyl alcohol that is at least 99% pure, derived from agricultural products, and blended exclusively with petrol.
  • Ethanol is one of the principal biofuels, which is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
  • It has medical applications as an antiseptic and disinfectant. It is used as a chemical solvent and in the synthesis of organic compounds, apart from being an alternative fuel source.

Impacts of Ethanol blending:

  • Impact on Environment:
    • The use of E20 as fuel reduces carbon monoxide emissions by 50% in two-wheelers and 30% in four-wheeler vehicles.
    • Hydrocarbon emissions also reduce compared to unblended petrol.
    • Ethanol blending can thus reduce emissions in vehicles
  • Impact on Consumers:
    • The fuel efficiency of vehicles will reduce by:
    • 6-7% for4 wheelers designed for E0 and calibrated for E10
    • 3-4% for 2 wheelers designed for E0 and calibrated for E10
    • 1-2% for 4 wheelers designed for E10 and calibrated for E20
    • However, with improvements in engines, the loss in fuel efficiency can be minimized.
  • Impact on Vehicle Manufacturer:
    • Engines and components will need to be tested and calibrated with E20 as fuel.
    • No major change in the assembly line is required.
    • Vendors need to be developed for the procurement of additional components compatible with E20.

Challenges associated:

  • Production Facilities: Ethanol production facilities have to be augmented if the goals of 20% blending by 2030 are to be achieved. Currently, ethanol production is largely confined to the sugar producing states. Sugar mills, which are the key domestic suppliers of bio-ethanol to OMCs, were able to supply only 57.6% of the total demand. 
  • Availability of sufficient feedstock on a sustainable basis: Current regulations in the country allow production of ethanol from sugarcane, sugar, molasses, maize and damaged foodgrains unfit for human consumption. Further, surplus rice with FCI is also allowed.
  • Availability of Ethanol: Ethanol is not equally available all over the country. This leads to an increase in transportation and logistics costs. Moreover, handling and storage of ethanol are also risky as it is a highly flammable liquid.
  • Challenge for vehicle manufacturers: Vehicle manufacturers must work with vendors to develop automobile parts compatible with ethanol. They should work on engine optimization for higher ethanol blends.
  • Environmental clearances: Currently, ethanol production plants/distilleries fall under the “Red category” and require environmental clearance under the Air and Water Acts for new and expansion projects. This often takes a long time leading to delays.

Way Forward:

  • Enhance Infrastructure: A majority of the ethanol units are concentrated in 4 to 5 states where sugar production is high but food grain-based distilleries are now being set up across India.
    • There have been efforts to make ethanol from agricultural waste.
  • Fund allocation in Automobile sector: All automobile materials produced after 2009 are compatible with 10% ethanol. However they are not compatible with E20.
    • The industry body the Society of Indian Automobile Manufacturers (SIAM) has guaranteed that “once a road-map for making E10 and E20 available in the country is notified, they would gear up to supply compatible vehicles in line with the roadmap”.
  • To achieve low carbon emissions: It can solve the problem of agricultural waste as well as sugar rates plummeting due to excess production, therefore providing security to sugarcane farmers.
    • It can help accomplish dual goal of strengthening energy security with low carbon emission.
  • To fix the prices of Raw materials: The procurement of ethanol by OMCs is governed by an administered pricing mechanism that fixes prices every year based on the raw material used.
    • This fixing of the price of raw materials for production had led to India producing ethanol at prices higher than other countries.
  • Make the process sustainable: The report highlighted the excessive use of water — estimated at 2,860 litres— for the production of one litre of ethanol from sugar. Hence there is a need to move to more environmentally sustainable crops.


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