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Ethanol Blending

Context: It is observed that distilleries have diversified from molasses to a range of feedstocks, enabling blending rates with petrol to more than double to 11.75% in past five years.

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  • Over the past five years, India’s ethanol production has significantly increased which has been evident from sugar mills/distilleries having supplied increasing quantities of ethanol to oil marketing companies (OMCs), reaching an estimated 559 crore litres in 2022-23, up from 38 crore litres in 2013-14.
  • India has introduced a 20% ethanol-blended petrol program in 2023, with a target to cover the entire country by 2025 to reduce the country’s dependence on fossil fuels and curb carbon emissions.
  • Initially, ethanol was produced mainly from ‘C-heavy’ molasses obtained from sugar mills. However, the ethanol blending program has diversified its raw material sources, including ‘B-heavy’ molasses, direct sugarcane juice, rice, damaged grains, maize, jowar (sorghum), and other millets. Ethanol yields from grains are higher than from molasses.
  • Some sugar companies have installed distilleries with the ability to operate on multiple feedstocks throughout the year. This flexibility allows them to switch between different raw materials based on seasonal availability and market demand.


  • Ethyl alcohol or Ethanol (C2H5OH) is a biofuel that is naturally made by fermenting sugar.
  • While it is mostly derived by extracting sugar from sugarcane, other organic matter like food grains can also be used for its production.
  • One ton of sugarcane yields around 70-75 litres of ethanol if processed directly from juice, while one ton of B-Heavy Molasses produces about 320 litres of biofuel.

What is Ethanol Blending?

  • Ethanol, an anhydrous ethyl alcohol having chemical formula of C2H5OH, can be produced from sugarcane, maize, wheat, etc. which are having high starch content.
  • In India, ethanol is mainly produced from sugarcane molasses by fermentation process.
  • Ethanol can be mixed with gasoline to form different blends.
  • As the ethanol molecule contains oxygen, it allows the engine to combust the fuel more completely, resulting in fewer emissions and thereby reducing the occurrence of environmental pollution.
  • Since ethanol is produced from plants that harness the power of the sun, ethanol is also considered as renewable fuel.

What is the need for Ethanol Blending?

  • Saving Exchequer: According to a report by a special expert committee set up by the Centre, India’s net import of petroleum was 185Mt at a cost of $551 billion in 2020-21.
    • Hence, a successful E20 programme can save the country $4 billion per annum, that is, around Rs 30,000 crore.
  • Climate Friendly: ethanol is a less polluting fuel and offers equivalent efficiency at lower cost than petrol.
    • Hydrocarbon emissions are reduced by 20% with ethanol blends compared to normal gasoline.
  • Fuel Efficiency:
    • Enhancing engine performance: Ethanol serves as an octane booster, which can enhance engine efficiency and lessen knocking noises.
    • Support for the agricultural sector: It will help the sugar mill owner to pay farmers their pending FRP for sugarcane. It will also mitigate the problem of low sugar prices in the international market.
  • Farmers Income: More ethanol produced from farm residue will boost farmers’ income and minimize air pollution by reducing the amount of stubble burned.

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What are the Challenges in Ethanol Blending?

  • Making efficient vehicles: There is an estimated loss of six-seven per cent fuel efficiency for four-wheelers and three-four per cent for two-wheelers when using E20. These vehicles are originally designed for E20 and calibrated for E10.
  • Unregulated emissions: The unregulated carbonyl emissions, such as acetaldehyde emission were higher with E10 and E20 compared to normal petrol.
  • Price uncertainty: The prices of both ethanol and sugarcane are fixed by the government leading to concerns among investors regarding the price of bioethanol.
  • Expensive: These fuels although are cleaner and complete combustion take place in them but have higher evaporative emissions from fuel tanks and dispensing equipment.
  • Food Insecurity: Sugar and cane production that end up in the petrol tank cannot also appear on the dinner plate, in animal fodder, be stored in warehouses, or be exported.
  • No Reduction in Emission of Nitrous Oxide: Because ethanol burns more completely than petrol, it avoids emissions such as carbon monoxide. However, there is no reduction in nitrous oxides, one of the major environmental pollutants.

India’s Ethanol Blending Programme

As part of its carbon reduction commitments, India has launched the Ethanol Blended Petrol (EBP) programme to mix this biofuel with petrol to reduce the consumption of fossil fuel.

  • Launch: It was launched in 2003 in in 9 States and 4 UTs. Later, it has been extended to whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands with effect from 01st April 2019.
  • Objective: It seeks to achieve blending of Ethanol with motor sprit with a view to reducing pollution, conserve foreign exchange and increase value addition in the sugar industry enabling them to clear cane price arrears of farmers.
  • Need: Blending locally produced ethanol with petrol will help India strengthen its energy security, enable local enterprises and farmers to participate in the energy economy at the same time reduce vehicular emissions.
  • Targets: In December 2020, the government advanced its target of achieving 20% blending (E20) from 2030 to 2025.
  • Successful results: Ethanol procurement by Public Sector OMCs has increased from 38 crore litre in Ethanol Supply Year 2013-14 to contracts of over 452 crore litre in ongoing ESY 2021-22.
  • The target of achieving an average 10% blending was achieved in June 2022, way ahead of the target date set for November 2022.

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“Roadmap for Ethanol Blending in India: 2020-2025”

  • Raise pan-India ethanol production capacity from the current 700 to 1500 crore litres.
  • Phased rollout of E10 fuel by April 2022.
  • Phased rollout of E20 from April 2023, its availability by April 2025.
  • Rollout of E20 material-compliant and E10 engine-tuned vehicles from April 2023.
  • Production of E20-tuned engine vehicles from April 2025.
  • Encourage use of water-sparing crops, such as maize, to produce ethanol.
  • Promote technology to produce ethanol from non-food feedstock.

Other government steps to improve ethanol blending

  • Capacity improvement: Enhancement of ethanol distillation capacity to 923 crore litre per annum.
  • Long-Term Off-take Agreements (LTOAs): It was envisioned to encourage the setting up of 431 crore litre per annum capacity of Dedicated Ethanol Plants (DEPs) in ethanol deficit States by private players. This is expected to bring in investments of Rs.25,000-Rs.30,000 crores in coming years.
  • Facilitating logistics: The government has ensured multimodal transportation of Ethanol and ethanol-blended petrol by railways and pipelines to facilitate ease of doing business and achieving the objectives of Atmanirbhar Bharat.
  • Clearing farmer’s Dues: The government took steps including the diversion of sugar and sugar-based feedstock for the production of ethanol aimed at reduction of cane farmers’ dues.
  • Need for revised pricing: As the Fair and Remunerative Price (FRP) of sugarcane & ex-mill price of sugar have undergone changes, there is a need to revise the ex-mill price of ethanol derived from different sugarcane-based feedstocks.

Way Forward

  • Ethanol would need to be distributed from surplus to deficit states according to criteria to enable a pan-Indian roll-out and to ensure uniform availability of ethanol blends throughout the nation.
  • Promoting Advanced Biofuels: To take advantage of this readily available resource without compromising the food production system, “Advanced Biofuels” technology, including second generation (2G), should be encouraged.
  • Establishing a Floor Price for Ethanol: The government may set a floor price for ethanol for a few years with an escalation clause for purchase by oil marketing corporations to offer consistency and to promote investment by entrepreneurs in expansion/new ethanol capabilities.
  • Food security and ethanol blending must coexist in harmony, according to India’s biofuel strategy, which also prohibits using any food crops that are overabundant for fuel production.
  • Future-proofing the automotive industry: The industry and petrol stations should be prepared for future initiatives like E85 and E100.

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