Overview of Ethanol Use in Fuel
The use of ethanol as a fuel alternative to petrol is established globally, with countries like the U.S. and Brazil leading in ethanol blending practices.
History and Purpose
- Ethanol blending originally emerged as a response to the oil shock of the 1970s.
- It is promoted as a carbon-neutral option.
India's Strategy and Economic Implications
- For India, the primary motivations for ethanol use are import substitution and cost reduction.
- The government aims to save $10 billion annually through ethanol blending up to 20%.
- However, the economic benefits might be unevenly distributed among farmers, traders, and distillers.
- India plans to utilize:
- C-heavy molasses is not used for sugar production.
- Broken rice that might otherwise spoil in storage.
- Increase maize acreage and productivity, considered agriculturally less demanding.
Challenges and Concerns
- There are concerns about prioritising food stocks over ethanol production in case of shortages.
- The import substitution advantage might be diminished by the import of farm inputs like fertilisers.
- Ethanol has an efficiency penalty in that it can affect material durability and corrode fuel systems.
Compatibility and Standards
- Global studies indicate compatibility of vehicles manufactured under various standards (Euro 2, U.S. Tier 1, and India's BS 2) for ethanol use up to E15.
- India's BS 2 standard vehicles have features to mitigate the efficiency and durability issues associated with ethanol.
- Vehicles sold in India since 2023 are required to handle up to E20 ethanol blends.
Consumer Impact and Policy Recommendations
- Consumers in India currently have no choice in fuel options.
- Price reductions claimed by the government do not seem to benefit consumers at fuel stations.
- India is also developing ethanol-specific standards and following Brazil's lead in adopting E27 blends.
- The government and manufacturers need to provide transparency on vehicle compatibility with ethanol.
- Manufacturers should disclose past vehicle models' ethanol compatibility and suggest mitigation strategies.
- The government should support insurance claims related to ethanol use.
