Ethanol Blending in India: Targets, Progress & Challenges

In recent years, India has emerged as a global leader in biofuel policy, with ethanol blending in petrol playing a pivotal role in its energy transition. Driven by goals of energy security, reduced fossil fuel dependency, rural economic growth, and lower emissions, the Ethanol Blended Petrol (EBP) Programme has charted one of the most dynamic biofuel journeys in the world.

The Targets: Setting Ambitious Goals

India’s biofuel aspirations are reflected in its blending targets. Initially, under the National Policy on Biofuels 2018, the country aimed to achieve 20% ethanol blending in petrol (E20) by 2030. However, recognizing the potential benefits and early momentum, the government advanced this target to the Ethanol Supply Year (ESY) 2025–26. 

To meet this goal, India needs approximately 1,100–1,700 crore litres of ethanol annually, requiring substantial capacity expansion in distillation, infrastructure, and feedstock availability. 

Progress So Far: From Single Digits to Bold Milestones

India’s progress on ethanol blending has been remarkable. In the Ethanol Supply Year 2013–14, blending levels stood at a mere 1.5%, but a series of policy reforms and market interventions quickly accelerated growth.

By ESY 2022–23, blending had surpassed 12%, and in the current 2024–25 period, the average national blending level exceeded 15%, with some states approaching 18–19%.

According to industry associations, India has even achieved the 20% blending target ahead of schedule, marking a major milestone in its renewable energy journey.This growth has translated into multi-faceted gains:

• Energy security: Reduced crude oil imports and stronger fuel self-reliance. 
• Economic impact: Substantial payments to farmers and distillers, stimulating rural income. 
• Environmental benefits: Significant cuts in carbon emissions through cleaner-burning fuel blends.

Additionally, the government has introduced policies to diversify feedstocks beyond sugarcane, including maize, damaged food grains, and agricultural residues, to expand ethanol production sustainably. 

Challenges: Barriers on the Path to Blending Targets

Despite impressive progress, several persistent challenges must be addressed for ethanol blending to reach its full potential.

1. Feedstock Sustainability & Water Use

India’s ethanol production has historically relied heavily on sugarcane, a crop that is water-intensive. Producing ethanol from sugarcane and other traditional sources uses substantial water, exacerbating stress in regions already facing water scarcity. This raises questions about long-term sustainability, pushing policymakers and industry players to promote advanced feedstocks such as crop residues and cellulosic biomass.

2. Food vs. Fuel Debate

Using food grains such as rice and maize for ethanol can create trade-offs with food security and price stability. While diverting surplus or damaged stocks to ethanol helps manage waste, excessive use during lean seasons may tighten food supply and push up prices.

Balancing energy needs with agricultural priorities requires careful planning and robust policy safeguards.

3. Infrastructure & Production Capacity

Though ethanol production capacity has expanded, capacity gaps and logistical bottlenecks persist in several states. These issues sometimes lead to uneven supply and increased transportation costs, slowing down uniform E20 rollout nationwide. 

Investment in distillation facilities, storage tanks, and blending infrastructure remains a priority to ensure consistent fuel quality and availability.

4. Vehicle Compatibility & Consumer Awareness

While modern vehicles are increasingly manufactured to be compatible with E20 fuel, older vehicles may face challenges without proper tuning or retrofits. Some vehicle owners report concerns about fuel efficiency and engine wear, though official clarifications emphasize that E20 does not void insurance or pose safety risks for compliant vehicles. 

Promoting consumer awareness and ensuring clear labeling at fuel stations will smooth the transition to higher blends.

Looking Ahead: Sustaining Momentum

Achieving and surpassing the 20% ethanol blending target marks a major milestone for India’s energy policy, but the journey is far from over. Future success will depend on:

• Continued diversification of feedstocks
• Investments in second-generation (2G) ethanol technologies
• Strengthening supply chains and storage infrastructure
• Coordinated policy interventions to balance energy, food, and environmental needs

India’s ethanol blending story is more than a policy; it represents a strategic blend of economic opportunity, environmental stewardship, and energy resilience. With sustained effort and innovation, ethanol blending can continue to drive India’s transition to a cleaner and more self-reliant energy future.