As part of its evolving Ethanol Blended Petrol (EBP) Programme, the Indian government is pushing to raise ethanol blending in petrol beyond the existing 20 percent (E20). This expected increase follows a draft notification that has been readied by the government, with testing of vehicles running E85 fuel already underway, ET Auto cited. This push has likely come to the fore due to the volatility created by the Middle East crisis. So, what do we know so far and how this could impact all the parties involved?
- Only around half of ethanol capacity currently being used
- Higher ethanol utilisation to help cut crude oil imports
- Ethanol production and usage challenges still a concern
Why the Indian government could raise ethanol blending in petrol?
Reducing reliance on imported crude oil a key factor for the government
India imported 243.2 million tonnes of crude oil in FY2024-25, costing the nation Rs 11,60,618 crore. While not all of this crude goes towards the production of petrol, it is an expenditure that has gone up considerably with each passing year. The existing 20 percent blending of locally produced ethanol reduces India’s overall reliance on crude oil imports. However, the Middle East conflict showed just how disruptive this supply chain can be.
India’s ethanol production capacity stands at around 2,000 crore litres at the moment, out of which only about 1,100 crore litres is being utilised. Furthermore, there will be another 400 crore litres of ethanol capacity being added in 2027. The government is hoping to address this under-utilisation – one way could be by increasing the percentage of blending – from 20 percent (E20) to perhaps as high as 85 percent (E85). While this may address concerns regarding India’s dependence on imported crude, it will not be without challenges.
Main challenges in increasing ethanol blending
Challenges include technical complexities, possible cost hike and environmental impacts
One of the aspects behind ethanol blending comes in the form of technical complexities for auto manufacturers. Cars manufactured after April 2023 are fully E20 compliant while also being capable of accepting ethanol blends up to 30 percent. However, raising this any further without enough lead time for automakers and component OEMs will lead to premature wear & tear of engine and fuelling mechanisms in vehicles that were not designed to run on flexible fuels.
Flex-fuel vehicles are designed from the ground-up to accept fuel with varying levels of blends. Speaking of which, fuel stations across the country will also require separate storage tanks for regular petrol and ethanol-blended petrol, plus dedicated dispensing mechanisms for each. Ethanol also introduces a higher likelihood of moisture, accelerated corrosion damage is also a factor that OEMs must prepare for.
Considering the lower energy density of ethanol over petrol, increasing the ethanol blend will also lead to a drop in engine output and mileage. Then there is the higher cost of flex-fuel vehicles to consider, too. The government could offset some of these challenges and enhance customer acceptance rates by offering subsidies for higher ethanol-blended petrol.
Then there is the question of choice – motorists must have the option of picking from a variety of fuel-blend percentage – depending on the requirement and vehicle compatibility. The overall process of extracting ethanol isn’t cheap, either – this could make the end product more expensive at the pumps. While the government’s policy on biofuels permits the use of corn, cassava, rotten potatoes, damaged food grains and agriculture residues, ethanol production in India primarily uses sugarcane juice and molasses as raw materials. Unless an alternate source of ethanol is planned, continuing with a water-intensive crop like sugarcane as the chief raw material can cause harm to the environment in the long run by depleting aquifers and nutrients in the soil.
Needless to say, E85 or higher are not practically possible right away. There will be an acceptance curve – from consumers, car manufacturers, parts suppliers, oil and agriculture companies, etc. – high ethanol blends will have to be introduced in a phased manner.
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