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Ethanol Blending

Posted 19 Aug 2025

4 minread

Why in the News?

Union Minister for Petroleum and Natural Gas announced India's achievement of 20% Ethanol blending target in petrol.

About Ethanol

Ethanol (C2H5OH), considered a renewable fuel, is an anhydrous ethyl alcohol produced from sugarcane, maize, wheat, and other crops with high starch content.
It is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
Types of Ethanol:
- 1^st Generation Ethanol: It is made from food crops such as cereals (rice, wheat, barley, corn and sorghum), sugarcane, sugar beet etc.
- 2^nd Generation Ethanol: It is made from ligno-cellulosic or woody biomass, or agricultural residues/waste such as wheat straw, corn stover, wood etc.
- 3^rd Generation Ethanol: It includes those derived from aquatic biomass such as algae.
- 4^th Generation Ethanol: It is derived from engineered plants and microorganisms.

About Ethanol Blended Petrol (EBP) Programme

Genesis: Launched in 2003 to promote blending of ethanol in petrol.
About Ethanol Blending
- Definition: Ethanol blending refers to the process of mixing ethanol with petrol to create a more sustainable and cleaner burning fuel.
- Types: E10 (10% Ethanol by Volume), E20 (20% Ethanol), E85 fuel (85% ethanol by volume).
  - The use of E-20 gives better acceleration, better ride quality and lowered carbon emissions by approximately 30% as compared to E10 fuel.
Target: National Policy on Biofuels (2018), as amended in 2022, advanced the target of 20% blending of ethanol in petrol to 2025-26 from 2030.
- National Policy on Biofuels:
  - Use of Sugarcane Juice, Sugar Beet, Cassava, Damaged food grains, Rotten Potatoes, unfit for human consumption for ethanol production.
  - Use of Surplus food grains to be used for ethanol production and blending with petrol.
  - Achievement: Ethanol production increased from 38 crore liters in 2014 to over 660 crore liters in 2025.

Challenges of Ethanol Blending in India

Food Security and Inflation: Biofuel expansion could exacerbate food insecurity, particularly for vulnerable populations as per FAO Report 2023. E.g. Over diversion of food crops for ethanol production.
Environment: Ethanol blending is heavily dependent on Sugarcane in India, a water intensive crop affecting water aquifers.
Technological and Vehicle Cost: India's vehicle fleet transitioning to E20 and beyond requires modifications in engine design and fuel systems, which may be costly.
- Many older vehicles and two-wheelers lack ethanol-compatible parts, making them less tolerant to higher blends.
Fuel efficiency and Vehicle Integrity: Ethanol, being lower in energy density than petrol, results in a marginal decrease in mileage.
- Older engines may struggle with air-fuel adjustments on ethanol blends, resulting in drivability and emissions problems.
- Ethanol is prone to water absorption and phase separation, increasing the risk of clogging and fuel system failures.
Supply of Ethanol:
- Availability of ethanol across the country: E.g. Ethanol blending has not been taken up in North-East states due to non-availability of feedstock or industries or high cost of logistics.
- Restrictions on inter-state movement of ethanol due to non-implementation of the amended provisions of Industries (Development & Regulation) Act, 1951 by all the States.
- The high cost of logistics and transport related emissions due to Transport of ethanol to different places.
- The need for storage infrastructure for ethanol at marketing terminals / depots.

Initiatives facilitating Ethanol Blending

PM JIVAN (Jaiv Indhan- Vatavaran Anukool fasal Awashesh Nivaran) Yojana: For providing financial support to integrated bio-ethanol projects for setting up Second Generation (2G) ethanol projects
Ethanol Interest Subvention Schemes (EISS) launched to foster the establishment of Dedicated Ethanol Plants (DEPs).
Reduction in GST on ethanol meant for EBP Programme from 18% to 5%. However, crude ethanol still continues to be taxed at 18%.
Amendment to Industries (Development & Regulation) Act, 1951 for smooth movement of ethanol across country.

Conclusion

India's commitment to ethanol blending represents a transformative approach to energy security, environmental sustainability, and economic development. With potential biodiesel in pipeline, care must be taken to cater to the challenges encountered in the ethanol-blended petrol introduction. A phased roll-out is thus the need of the hour.

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