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In 2014, India’s ethanol blending programme was little more than a footnote in energy policy. Only 1.5% of petrol sold in the country had ethanol mixed into it. Most people at the pump had no idea. And why would they? Petrol was petrol, and the idea of cars running partly on farm produce sounded distant, maybe even gimmicky.
Fast forward to 2025. India has declared that it has reached 20% blending—five years before the 2030 deadline it had originally set. This isn’t just a technical milestone. It’s one of the fastest fuel transitions anywhere in the world, achieved in a country where energy demand keeps climbing. And it’s sparking both celebration and unease.
So let’s unpack what’s really going on.
What exactly is ethanol-blended petrol?
Ethanol is a clear, alcohol-based fuel made from plants. In India’s case, the bulk comes from sugarcane juice, molasses, maize, and sometimes surplus rice procured by the Food Corporation of India. When you blend it with petrol, you get a fuel that burns cleaner because ethanol carries oxygen atoms. That extra oxygen helps petrol combust more completely, which means fewer harmful emissions like carbon monoxide and hydrocarbons.
It also raises the octane number of the fuel—a measure of how well it resists knocking in engines—which can actually improve performance in cars designed for it.
Globally, blends vary. In the US, you’ll see E10 or E15 at most pumps. Brazil runs on E27 or even higher without fuss. In India, until recently, E10 was the standard. Now, E20 is here. The government is even talking about E25 and E30 in the coming decade.
E10, E20, and E25 are simply labels for how much ethanol is mixed into petrol. E10 means 10% ethanol + 90% petrol. E20 means 20% ethanol + 80% petrol. E25 means 25% ethanol + 75% petrol. The higher the number, the more ethanol your vehicle is running on.
Why is India doing this?
Three reasons keep coming up: money, environment, and farmers.
First, the money. India imports more than 85% of its crude oil. Every spike in global prices squeezes the economy, raises the import bill, and weakens the rupee. Ethanol blending reduces that vulnerability. Since 2014, it has saved more than ₹1.4 lakh crore in foreign exchange. That’s money that would otherwise have gone to oil exporters.
Second, the environment. The government says ethanol blending has cut nearly 700 lakh tonnes of CO₂ emissions so far. To put that in perspective, that’s equivalent to planting 30 crore trees. At a time when India is under pressure to show progress towards its net-zero 2070 goal, this is a politically valuable number.
Third, farmers. Ethanol demand gives sugarcane and maize farmers a guaranteed buyer. Between 2014 and 2025, more than ₹1.2 lakh crore has been paid out to cultivators. For sugarcane growers in states like Maharashtra and Uttar Pradesh, ethanol sales have reduced arrears and made payments more reliable. Policymakers like to call farmers “urjadaata” — energy givers — as well as “annadaata,” the traditional food providers.
On paper, this looks like a win-win: less oil dependence, more farmer income, and fewer emissions. But dig deeper and the story becomes more layered.
Most of what goes into your tank today is first-generation ethanol, made from sugar, starch, or grains that could otherwise be food or feed. That’s why the “food versus fuel” debate keeps coming back. To address this, India is now investing in second-generation (2G) ethanol. Unlike cane or rice-based ethanol, 2G is made from crop residues—rice straw, wheat straw, corn cobs—the very stuff usually burnt in fields and responsible for choking Delhi’s air every winter. Oil PSUs are setting up large 2G plants in Haryana, Punjab, and Odisha. If they scale up, this could ease the food dilemma while also tackling stubble burning.
But what about your car?
Here’s where things get complicated. Ethanol contains less energy per litre than petrol. In practice, this means that vehicles not designed for higher ethanol blends can see lower mileage. For an E10 car running on E20 fuel, estimates suggest a dip of 3–6% in efficiency. For new vehicles designed for E20, the drop is smaller—closer to 1–2%.
Automakers have been preparing. Since 2023, most new petrol vehicles in India carry an E20 sticker to indicate compatibility. For older models, manufacturers recommend simple upgrades: replacing rubber hoses, gaskets, and fuel lines with ethanol-resistant versions. These aren’t big-ticket expenses, but for millions of vehicle owners who never asked for this change, it feels like an extra burden.
And this is showing up in consumer sentiment.
A LocalCircles survey of 36,000 people across 315 districts found that two in three petrol owners opposed the E20 rollout. Complaints about falling mileage and rising costs are widespread on social media. Some automakers, like Maruti, are offering E20 material kits that cost around ₹6,000. Bajaj recommends fuel cleaners for two-wheelers. These solutions exist, but many consumers ask: why should we pay more just to keep our vehicles running?
The unease has now reached the courts. A Public Interest Litigation was filed in the Supreme Court demanding that ethanol-free petrol (E0) be made available nationwide. The petition argues that forcing motorists to use fuel they weren’t prepared for is unfair and costly, and that pumps should clearly label ethanol content like in the US or EU. The government’s response has been firm: the fears are exaggerated, efficiency drops are marginal, and the environmental benefits outweigh the concerns.
Still, consumers remain anxious for other reasons too. Ethanol is hygroscopic—it absorbs water. If a car or bike is left unused for weeks, water can separate inside the tank, causing corrosion and microbial growth. For most daily commuters this isn’t a big problem, but it’s another reminder that ethanol isn’t identical to petrol.
The food versus fuel dilemma
Beyond cars, there’s a bigger tension: where does all this ethanol come from?
Sugarcane currently supplies about 40% of India’s ethanol. That’s good for farmers, but sugarcane is a thirsty crop. It takes 60–70 tonnes of water to produce a single tonne of cane. Per litre of ethanol, that translates to 2,800–4,000 litres of water. Many districts in Maharashtra and Uttar Pradesh already over-extract groundwater, and droughts are becoming more frequent with climate change. Studies show that nearly 30% of India’s land is already degraded, and sugarcane farming adds to the pressure.
To reduce reliance on cane, the government has allowed more maize and surplus rice to be diverted to ethanol. In 2025, the Food Corporation of India allocated 5.2 million tonnes of rice for ethanol, a huge jump from just a few thousand tonnes earlier. More than a third of India’s maize output was also diverted.
The result? India had to import nearly a million tonnes of corn in 2024–25, six times more than the year before. The poultry industry, which depends on corn for feed, saw its costs soar. Farmers may get paid, but somewhere else, consumers pay more for eggs and chicken. It’s a classic example of how one policy win can ripple into another sector’s pain.
And monoculture risks are real. If farmers keep shifting land to maize and sugarcane, India’s already fragile supply of pulses and oilseeds will shrink further, making the country even more dependent on imports for basic protein and edible oils. That’s an agricultural trade-off hidden inside the ethanol story.
This is the classic “food versus fuel” debate. Should scarce crops feed people, livestock, or cars? Experts warn that in a country where nearly 250 million people still face hunger, using food grain for petrol is ethically and economically fraught.
Did consumers benefit?
Another sticking point is whether the benefits of ethanol blending have actually reached ordinary people.
Ethanol boosts the octane number of petrol, which allows oil companies to cut back on costly additives like MTBE (used to improve combustion). That’s a saving for refiners, but not for consumers. Retail petrol prices in India have barely budged in recent years, even when global crude prices fell.
In fact, between 2020 and 2025, PSU oil companies paid record dividends to the government, but consumers saw almost no price relief. And since ethanol procurement prices are fixed by the government, often above global levels, motorists are indirectly subsidising farmers every time they fill up.
For the government, ethanol blending is a story of revenue and stability. For consumers, it hasn’t translated into cheaper fuel.
Globally, India’s ethanol push has also drawn attention. The US has been pressing India to open up imports of ethanol, calling current restrictions a trade barrier. Brazil, the world’s ethanol powerhouse, has signed agreements with India on flex-fuel technology and cooperation. Meanwhile, every litre of ethanol blended here is one less barrel of crude imported from the Gulf—a strategic advantage at a time when shipping disruptions in the Strait of Hormuz or OPEC price wars can rattle India’s economy.
But ethanol has a ceiling. Beyond E20 or E25, ordinary vehicles can’t cope. You need dedicated flex-fuel vehicles (FFVs) to run on higher blends like E85, which Brazil uses widely. Indian automakers have begun pilot projects, but until FFVs become mainstream, there’s a natural blending cap. And looking ahead, there’s a saturation risk: as EVs rise, petrol consumption could plateau or even fall, leaving distilleries underutilised unless ethanol finds new markets in aviation fuels, chemicals, or exports.
What about electric vehicles?
This is the elephant in the room. Ethanol cuts emissions compared to petrol, but EVs cut them far more dramatically. Cities like Beijing have shown how quickly EV adoption can reduce urban pollution. So why not leapfrog straight to EVs?
The answer lies in timing and infrastructure. In 2024, only 7.6% of vehicles sold in India were electric. To reach the government’s target of 30% by 2030, sales will need to jump by over 22% in just five years. That’s a tall order.
On top of that, India depends on China for rare earth elements used in EV batteries and motors. When China restricted exports, companies like Maruti Suzuki had to scale back EV production plans. Without a stable supply of these minerals, EV manufacturing can’t ramp up as quickly as planned.
So ethanol becomes the bridge. It lowers emissions from the vast fleet of petrol vehicles already on Indian roads, while EVs slowly build scale and affordability.
So what happens next?
For now, the government says India will stick with E20 until October 2026. Beyond that, whether the country goes to E25 or E30 will depend on consultations with automakers, farmers, oil companies, and scientists.
That gives India a window. A window to expand 2G ethanol, to build consumer trust with proper labelling, to diversify feedstocks so maize imports don’t soar, and to plan what role ethanol plays alongside EVs and hydrogen in a 2070 net-zero pathway.
Because at the end of the day, this isn’t just about what flows from a pump nozzle. It’s about who pays, who gains, and who carries the hidden costs. Ethanol blending has saved billions, paid millions, and cut millions of tonnes of carbon. But it has also tested engines, squeezed food chains, and tapped fragile aquifers.
India’s ethanol leap is both a bold achievement and a careful balancing act. Its success will not be judged only by how early the country hit 20%, but by whether farmers, consumers, and ecosystems can all thrive under this new fuel mix.
FAQs
What is ethanol-blended petrol and how does it work?
Ethanol-blended petrol is a mix of petrol and ethanol, an alcohol-based fuel made from crops like sugarcane, maize, and rice. In India, petrol is now blended with 20% ethanol (E20), which helps reduce emissions, cut oil imports, and support farmers by creating demand for agricultural produce.
What are E10, E20, and E25 fuels in India?
E10, E20, and E25 refer to the percentage of ethanol blended with petrol. E10 is 10% ethanol + 90% petrol. E20 means 20% ethanol + 80% petrol. India reached E20 blending in 2025, five years ahead of its 2030 target, and is now exploring E25 and E30 options.
Why has India adopted ethanol blending in petrol?
India’s ethanol blending strategy addresses three key issues: reducing crude oil imports, cutting carbon emissions, and increasing income for farmers. The programme has saved over ₹1.4 lakh crore in foreign exchange and paid ₹1.2 lakh crore to cultivators between 2014 and 2025.
How does ethanol-blended fuel impact vehicle mileage?
Ethanol has lower energy content than petrol, which can lead to reduced mileage. Cars not designed for E20 fuel may experience a 3–6% drop in fuel efficiency. Newer E20-compliant vehicles see only a 1–2% dip. Some manufacturers also offer kits or upgrades to reduce this impact.
Can older vehicles in India use E20 fuel?
Older petrol vehicles can run on E20 but may need minor upgrades like ethanol-resistant fuel lines, hoses, and gaskets. Manufacturers like Maruti and Bajaj offer affordable solutions, though many users are concerned about extra costs and lower mileage.
What is the environmental impact of ethanol blending?
Ethanol blending helps reduce harmful emissions by promoting more complete combustion. India has avoided nearly 700 lakh tonnes of CO₂ emissions due to ethanol use—roughly equivalent to planting 30 crore trees. It’s seen as a key step toward India’s 2070 net-zero goal.
What are the concerns around ethanol’s impact on food security?
Ethanol production uses food crops like sugarcane, maize, and surplus rice, raising concerns over food security. Diverting these crops to fuel has led to maize imports and higher feed costs, affecting poultry prices. Experts warn of a food vs fuel trade-off.
Is ethanol production harmful to water resources?
Yes, especially when ethanol comes from sugarcane, a water-intensive crop. It takes 2,800–4,000 litres of water to produce just 1 litre of ethanol from sugarcane. Over-extraction of groundwater in major cane-producing states like Maharashtra and UP is a growing concern.
Has ethanol blending reduced petrol prices in India?
No, petrol prices have not significantly dropped despite ethanol blending. While oil companies save on additive costs, these benefits haven’t been passed on to consumers. Instead, PSUs have paid high dividends to the government, keeping pump prices steady.
Will ethanol compete with electric vehicles in India’s future?
Ethanol is seen as a transitional fuel while India ramps up EV infrastructure. With EVs accounting for only 7.6% of vehicle sales in 2024, ethanol helps cut emissions from the existing petrol fleet. Long-term, EVs and flex-fuel vehicles will shape the fuel mix.
