Ethanol Blending In India: Targets, Benefits and Current Status

Context: India pushes ethanol blending for fuel import savings and lower emissions, but faces challenges.

What is Ethanol and Why is it Used

• Definition: Ethanol (C₂H₅OH) is a renewable biofuel made by fermenting sugars from biomass (e.g., sugarcane, maize, broken rice, molasses).
• Nature: Colourless, volatile liquid; oxygenated fuel.
• Use in fuel: Mixed with petrol to form blends like E5, E10, E20 (E = ethanol, number = % ethanol in blend).
• Origin of blending:
  • Initiated in the early 2000s, scaled up under the Ethanol Blended Petrol (EBP) Programme.

Benefits claimed

• Carbon neutrality (though debatable in practice).
• Import substitution: For India, 20% blending could save ~$10 billion annually.
• Lower prices (though not always reflected at fuel pumps).

Current Status

• 2014: The Blending level was just 53% under the Ethanol Blended Petrol (EBP) Programme.
• 2022: Achieved 10% blending five months ahead of target.
• Original Goal: 20% blending (E20) set for 2030.
  Revised Goal: Advanced to 2025 due to faster progress.
• Current Status (Current ESY): E20 blending achieved ahead of the 2025 target.

Feedstock in India

• C-heavy molasses (by-product of the sugar industry).
• Damaged/broken rice.
• Maize and other starch-based crops.

Ethanol Blending In India: Downsides and Concerns

Agricultural & Food Security Risks

• Diverts crops like rice and maize from food to fuel, especially during years of shortage.
• Once the ethanol economy matures, political and economic pressure may prioritise industry over food needs.

Economic Limitations

• Import substitution benefits are reduced if farm inputs (e.g., fertilisers) are imported (fertiliser imports cost ~$10B annually).
• Retail fuel price reductions are not visible despite cheaper ethanol.

Technical / Engineering Issues

• Efficiency penalty: Lower energy density compared to petrol.
• Material durability & corrosion: Can damage fuel handling systems over time.
• Vehicle compatibility: BS 2 norms (India, since 2001) can handle up to E15 safely.
  • Vehicles since 2023 have been designed for E20.
  • Older vehicles may not be compatible beyond E5.

Policy & Market Concerns

• No consumer choice: Blended petrol is the default, even for older vehicles not designed for higher ethanol content.
• Price claims not visible: Lower cost of ethanol blending not reflected in retail prices.
• Transparency gap: Automakers not disclosing ethanol tolerance of older models.
  • Lack of clear mitigation measures for older vehicles.
• Insurance & liability: The Government should back claims if ethanol damage occurs.

Major Takeaways / Policy Needs for India

• Clear vehicle compatibility disclosures: Automakers should publish ethanol tolerance for all past models.
• Mitigation plans: For older vehicles (e.g., fuel system upgrades, material replacements).
• Insurance safeguards: Ensure ethanol-related damages are covered.
• Food security balance: Avoid displacing food crops or risking shortages.
• Transparent pricing: Pass ethanol blending savings to consumers.
• Gradual rollout with norms: India is adopting E27 norms (following Brazil), but must ensure readiness before scaling.

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