The Central Government’s drive to achieve 20% ethanol blending with petrol by the Ethanol Supply Year (ESY) 2025-26 is impressive, with public sector Oil Marketing Companies (OMCs) already achieving a blending rate of 19.7% in February 2025. For the current ESY (November 1, 2024, to October 31, 2025), the ethanol blending rate stands at an impressive 18% as of February 2025, according to the Ministry of Petroleum and Natural Gas.
From a mere 2% in ESY 2016-17, ethanol blending rose to 10% in 2021-22, 14.6% in ESY 2023-24, and continues to grow, reflecting consistent national efforts to meet biofuel policy targets. While this rapid progress offers significant benefits, such as foreign exchange savings on fossil fuel imports and enhanced energy self-sufficiency, there are critical reasons to reconsider the pace of this initiative.
- The Rising Dependence on Maize
Traditionally, ethanol production in India has relied on ‘C-heavy’ molasses, a by-product of sugar refining. However, the 2022 amendment to the National Biofuel Policy allowed alternative feedstocks like B-heavy molasses, sugar syrup, maize, and damaged food grains to be diverted for ethanol production.
In ESY 2023-24, maize accounted for the largest share of feedstock at 39.6%, a sharp rise from just 6.2% the previous year. While this diversification of feedstocks has supported the ethanol push, it raises serious concerns.
Maize is not just a biofuel feedstock; it is also a staple food, a key component in poultry and animal feed, and widely used in various industries. Diverting maize for ethanol production could exert upward pressure on prices, disrupt crop patterns, and create potential food security challenges.
Moreover, maize-based ethanol does not reduce greenhouse gas emissions as effectively as cellulosic ethanol or ethanol derived from waste materials, thus limiting its environmental benefits.
- Vehicle Compatibility Challenges
OMCs are currently selling E15 (15% ethanol-blended petrol) nationwide and E20 at select retail outlets. However, most Indian vehicles manufactured before 2022 are designed to run – at best – on E10 (10% ethanol-blended petrol). While newer vehicles can accommodate higher blends like E15 or E20, older vehicles risk engine damage or reduced performance with these blends.
Globally, even nations with high ethanol production capacities remain cautious. For instance, the U.S., where maize is a primary ethanol feedstock, has largely limited ethanol blending to 10%, despite having options like E15 and E85 (for flex-fuel vehicles). Similarly, major economies such as Europe, China, Canada, and Australia have not aggressively pursued blending beyond 10%.
Except for Brazil, which boasts a 27% blend, no other major nation has embraced high-blend ethanol strategies as enthusiastically as India. Additionally, estimates suggest a 6-7% loss in fuel efficiency for four-wheelers designed for unblended petrol or calibrated for E10. This makes higher ethanol blends a less efficient option for many consumers.
Conclusion
India’s ethanol blending policy has been a success story, with the blending rate nearing 15% in ESY 2023-24. However, as the country approaches the ambitious 20% target, it is crucial to pause and address underlying challenges.
Instead of rushing further, the focus should shift towards developing storage infrastructure, enhancing blending facilities, and strengthening multimodal transportation to ensure a smooth supply chain and overcome logistical hurdles.
Simultaneously, with the rise of electric vehicle (EV) adoption, the government must allocate resources towards building a robust EV charging infrastructure. Balancing the ethanol blending push with sustainable energy strategies will ensure that India meets its energy goals without compromising food security, environmental benefits, or consumer interests.