Ethanol blending

Unfounded narratives to subvert India’s achievement

Studies confirmed that E-20 fuel provides better acceleration, improved ride quality, and a reduction in carbon emissions of about 30 per cent compared to E10 fuel. With an octane number of 108.5, ethanol makes E-20 a great option for high- compression engines that need higher octane levels. Vehicles manufactured before 2009 may have mileage issues. Manufacturers recalibrated engines to adapt to E20 after 2009.

On 4 August 2025, the Ministry of Petroleum and Natural Gas issued a detailed response to certain concerns raised on the impact of 20 per cent ethanol-blended petrol (E-20) on mileage and vehicle life.

Biofuels and natural gas serve as bridge fuels for India. They provide a practical and non-disruptive way to transition towards meeting the country’s commitments to a greener future. This aligns with India’s Nationally Determined Contribution (NDC), in which the nation aims for net-zero emissions by 2070. A NITI Aayog study on life cycle emissions of ethanol reveals that greenhouse gas (GHG) emissions from sugarcane-based and maize-based ethanol are 65 per cent and 50per cent lower, respectively, than those from petrol.

Along with reducing pollution, there have been significant benefits for the rural economy, including the elimination of sugarcane arrears and improvements in the viability of maize cultivation in India. This translates to increased income for farmers.

The Ethanol blending programme translates a substantial portion of the fuel cost into farmers’ income, making the farmers both “Urjadaatas” and “Annadatas”. In 11 years starting from ethanol supply year 2014-15 to 2024-25 upto July 2025, ethanol blending in petrol by public sector oil marketing companies (OMCs) has resulted in savings/conservation of more than ₹1,44,087 crore of foreign exchange, crude oil substitution of about 24.50 million metric tonnes providing crucial energy security and CO2 emission reduction of approximately 73.60 million metric tonnes, equivalent of planting 300 million trees. With a 20 per cent blending rate, the expected payments to farmers this year alone will amount to ₹40,000 crore, and foreign exchange savings are projected to be around ₹43,000 crore.

In anticipation of concerns regarding the performance and mileage of E20 fuel, the Inter- Ministerial Committee (IMC) of the NITI Aayog thoroughly examined these issues as early as 2020. Research studies conducted by IOCL, ARAI, and SIAM supported the analysis carried out by NITI Aayog.

Using E-20 fuel leads to better acceleration, improved ride quality, and most importantly, a reduction in carbon emissions by approximately 30 per cent compared to E10 fuel. Ethanol has a higher octane number of about 108.5, compared to petrol’s 84.4, making ethanol-blended fuels a valuable alternative for modern high-compression engines that require higher octane levels. Vehicles designed for E20 fuel experience better acceleration, a crucial factor for city driving conditions. Additionally, ethanol’s higher heat of vaporisation lowers intake manifold temperatures, increases the density of the air-fuel mixture, and boosts volumetric efficiency.

In the past, petrol in India had a Research Octane Number (RON) of 88. Currently, regular petrol is rated at an RON of 91 to comply with BS-VI standards, which are designed to reduce harmful emissions. Furthermore, with the introduction of E20 blending, the octane rating has been improved to RON 95, resulting in enhanced anti- knock properties and overall performance.

The critiques suggesting that E20 causes a “drastic” reduction in fuel efficiency are misplaced. It is not the type of fuel that determines a vehicle’s mileage but a variety of other factors. Driving habits, maintenance practices such as oil changes and air filter cleanliness, tyre pressure and alignment, air conditioning load, etc, influence the mileage.

The government held extensive discussions with the Society of Indian Automobile Manufacturers (SIAM) and major vehicle manufacturers. Any potential reduction in efficiency for E10 vehicles has been minimal. In fact, some manufacturers have had vehicles compatible with E20 since as early as 2009. Therefore, concerns about a decline in fuel efficiency for these vehicles are unfounded.

Returning to E-0 petrol would mean sacrificing the significant progress made in reducing pollution and the success achieved in the energy transition. The IMC roadmap has been publicly available since 2021 and details a well-planned strategy for reaching E-20. Over the past four years, vehicle technology has improved, supply chains have been optimised, and the overall ecosystem has developed.

Brazil has been running on E27 successfully for years without any issues. The automakers like Toyota, Honda, Hyundai, etc., produce and sell vehicles in Brazil and India. Moreover, safety standards for E20 are well established through BIS specifications and automotive industry standards. In most parameters, including drivability, startability, metal compatibility, and plastic compatibility, there are no issues. In some older vehicles, certain rubber parts and gaskets may need to be replaced sooner than they would with non-blended fuel. This replacement is inexpensive and can be easily managed during routine servicing. It is a simple process that may need to be performed once during the vehicle’s lifetime, and it can be done at any authorised workshop.

There are calls to make ethanol-blended petrol cheaper than non-blended fuel because of its inherent cost advantages. However, vehicle users do not benefit from this cost difference. During the 2020-21 period, when the NITI Aayog report was prepared, ethanol was less expensive than petrol. However, over time, the procurement price of ethanol has risen, and now the weighted average price of ethanol is higher than that of refined petrol.

The average procurement cost of ethanol as of July 31, 2025, was ₹71.32 a litre, inclusive of transportation and GST. Oil marketing companies blend 20 per cent of this procured ethanol with motor spirit (MS). Price of C-heavy molasses-based ethanol increased from ₹46.66 in 2021-22 to ₹57.97 in 2024-25. Price of maize-based ethanol increased from ₹52.92 to ₹71.86 over the same period. Despite the increase in the price of ethanol compared to petrol, oil companies have not backed out of the ethanol blending mandate because the programme delivers on energy security, boosts farmers’ incomes, and promotes environmental sustainability.

Ethanol blending is a national programme. There are attempts to derail the programme by fomenting fear and confusion in the minds of car owners. They selectively pick up information and create a false narrative that insurance companies will not cover car damage due to the use of E20 fuels. The narrative is completely unfounded, and insurance companies have clarified their position. The use of E20 fuel does not affect the validity of vehicle insurance in India.

Automobile manufacturers continue to engage with vehicle owners to provide them with any support that warrants the optimum performance of vehicles. Any change in the mandate of E-20  will happen only after October 31, 2026, after submission of the Report of the Inter Ministerial Committee, evaluation of its recommendations, stakeholder consultations and a considered decision of the Government.

At the same time, the government will continue to promote cleaner, more sustainable fuel options and ensure that such transitions are implemented with minimal impact on consumers.

The Ethanol Blending Programme boosts farmers’ income by transforming a significant portion of fuel costs into earnings, making them both “Urjadaatas” and “Annadatas.” Since 2014-15, this initiative saved ₹1,44,087 crore in foreign exchange, substituted 24.50 million metric tonnes of crude oil, and reduced CO2 emissions by roughly 73.60 million metric tonnes—equivalent to planting 300 million trees. This year, farmers may receive ₹40,000 crore, while foreign exchange savings are ₹43,000 crore.

What is Ethanol?
Ethanol, also known as ethyl alcohol, is a flammable and colourless liquid. It is a versatile chemical compound commonly found in alcoholic beverages.

Ethanol has multiple applications as a renewable fuel, as a biofuel, and as an industrial solvent. Its production involves the fermentation of sugars derived from corn and sugarcane. During fermentation, yeast converts these sugars into ethanol and carbon dioxide.

Ethanol serves as a solvent in the production of disinfectants, cosmetics, personal care products, and various industrial goods, including fats, oils, and waxes. It is also a crucial component in the manufacture of plastics, lacquers, and other chemical compounds, in addition to its use in alcoholic beverages.

As a fuel, ethanol is blended with gasoline to improve vehicle efficiency and reduce emissions. In the United States and North America, this fuel is commonly referred to as gasoline, while many Commonwealth countries refer to it as petrol.

10 major ethanol producers

• Bajaj Hindustan Sugar
• Balrampur Chini Mills
• Bannari Amman Group.
• Dalmia Bharat Sugar and Industries
• Dhampur Sugar Mills
• Dwarikesh Sugar Industries
• EID Parry India  HPCL Biofuels
• Shree Renuka Sugars
• Triveni Engineering & Industries
  Source: https://www.techsciresearch.com/blog/top-ethanol-manufacturing-companies-in- india/4626.html