Ethanol blending involves mixing bioethanol, derived from plant sources like sugarcane, maize, and agricultural waste, with petrol to create a more sustainable fuel option. Indias Ethanol Blended Petrol (EBP) Programme, guided by the National Policy on Biofuels (2018, amended 2022), aims to reduce reliance on fossil fuels, enhance energy security, and promote environmental sustainability. Below is a comprehensive overview of the policy, its progress, benefits, challenges, and future roadmap.

The National Policy on Biofuels initially set a target of 20% ethanol blending in petrol (E20) by 2030, which was advanced to the Ethanol Supply Year (ESY) 2025-26 due to strong progress. The government has now achieved this 20% blending target ahead of schedule in 2025 and is planning for 30% blending (E30) by 2030. Additionally, a 5% biodiesel blending target in diesel is set for 2030, with current blending at around 0.5%.

India has made remarkable strides in ethanol blending:

• Blending Rates: Ethanol blending increased from 1.53% in 2014 to 10% in June 2022 (five months ahead of schedule), 12.06% in ESY 2022-23, 14.6% in ESY 2023-24, and 17.98% in ESY 2024-25 (as of February 2025). By mid-2025, India achieved 20% blending, five years ahead of the revised 2025-26 target.
• Infrastructure: Over 17,400 retail outlets nationwide dispense E20 fuel. Ethanol production capacity grew from 38 crore liters in 2014 to 661.1 crore liters by June 2025.
• Feedstocks: Ethanol is produced from sugarcane (juice, B-heavy, and C-heavy molasses), maize, damaged food grains, and surplus rice from the Food Corporation of India (FCI). Maize-based ethanol now accounts for 42% of supply, up from 0% in 2021-22.
• State-wise Blending: As of June 30, 2025, states like Haryana (19.3%), Bihar (19.02%), and Andhra Pradesh (19%) are close to or at 20% blending, while others like Andaman & Nicobar (6.26%) lag behind.

1. Energy Security:
   • India imports ~90% of its crude oil, exposing it to global price volatility. Ethanol blending has substituted 181-238.68 lakh metric tonnes of crude oil, saving over ?1.2-1.4 lakh crore in foreign exchange over the past decade.
2. Environmental Impact:
   • Ethanol burns cleaner, reducing carbon monoxide, particulate matter, and greenhouse gas emissions. It has prevented 50-698 lakh tonnes of CO? emissions, with sugarcane-based ethanol emitting 65% less and maize-based 50% less than petrol.
   • Supports India’s Net-Zero 2070 goal.
3. Rural Prosperity:
   • Ethanol production has provided ?87,558-1.21 lakh crore to farmers and ?1.45-1.96 lakh crore to distillers, boosting rural economies.
   • Creates jobs through distilleries and related industries, reducing rural migration.
4. Resource Optimization:
   • Utilizes surplus grains and agricultural waste, reducing food wastage.
5. Global Leadership:
   • The Global Biofuels Alliance (launched at the G20 Summit) positions India as a leader in biofuel technology and trade.
   • Energy Security:
     • India imports ~90% of its crude oil, exposing it to global price volatility. Ethanol blending has substituted 181-238.68 lakh metric tonnes of crude oil, saving over ?1.2-1.4 lakh crore in foreign exchange over the past decade.
   • Environmental Impact:
     • Ethanol burns cleaner, reducing carbon monoxide, particulate matter, and greenhouse gas emissions. It has prevented 50-698 lakh tonnes of CO? emissions, with sugarcane-based ethanol emitting 65% less and maize-based 50% less than petrol.
     • Supports India’s Net-Zero 2070 goal.
   • Rural Prosperity:
     • Ethanol production has provided ?87,558-1.21 lakh crore to farmers and ?1.45-1.96 lakh crore to distillers, boosting rural economies.
     • Creates jobs through distilleries and related industries, reducing rural migration.
   • Resource Optimization:
     • Utilizes surplus grains and agricultural waste, reducing food wastage.
   • Global Leadership:
     • The Global Biofuels Alliance (launched at the G20 Summit) positions India as a leader in biofuel technology and trade.

Despite its success, the ethanol blending program faces several hurdles:

1. Water-Intensive Production:
   • Sugarcane, a primary feedstock, consumes 70% of India’s irrigation water, exacerbating water stress in states like Maharashtra, Uttar Pradesh, and Karnataka.
2. Food vs. Fuel Concerns:
   • Diverting sugarcane and grains (e.g., maize, rice) to ethanol risks food price inflation and supply chain disruptions, especially during shortages.
3. Vehicle Compatibility:
   • Pre-2023 vehicles may face corrosion, reduced fuel efficiency (3-5% mileage drop), and engine wear with E20 fuel. Retrofitting older vehicles is costly, and only 35% of vehicles are E20-compatible.
   • Flexible Fuel Vehicles (FFVs) for higher blends (e.g., E85) are limited due to low automaker interest, high costs, and poor infrastructure.
4. Production and Logistics Bottlenecks:
   • Some states lack ethanol production capacity, leading to inter-state transport costs and delays. Inadequate storage and supply chain inefficiencies persist.
5. Pricing Issues:
   • Ethanol prices are government-fixed and may not reflect rising feedstock costs, impacting distillers. Consumers face higher fuel costs due to lower mileage.
6. Environmental Concerns:
   • Ethanol production generates vinasse, a pollutant-heavy wastewater that can harm ecosystems if untreated. Expanding cultivation may lead to deforestation and biodiversity loss.
7. Subsidy Dependence:
   • The program relies heavily on subsidies, tax breaks, and interest subvention schemes, risking collapse if policies change.

To sustain and scale ethanol blending, India can adopt the following measures:

1. Diversify Feedstocks:
   • Shift to less water-intensive crops like maize, sorghum, and agricultural residues. Promote second-generation (2G) ethanol from biomass via the PM-JI-VAN Yojana.
2. Promote FFVs:
   • Incentivize automakers to produce E20- and E85-compatible vehicles and offer affordable retrofitting kits.
3. Enhance Infrastructure:
   • Expand ethanol production and storage facilities, especially in non-sugar belt states, and establish more E20 fuel stations.
4. Stabilize Pricing:
   • Introduce a price stabilization fund and market-linked procurement to protect producers and consumers.
5. Address Environmental Concerns:
   • Mandate zero-liquid discharge (ZLD) systems for distilleries and promote drip irrigation for ethanol crops to reduce water use.
6. Strengthen Policy Coordination:
   • Implement single-window clearance for ethanol plants and ethanol-specific state policies to attract investment.
7. Explore Other Biofuels:
   • Scale up biodiesel blending and explore green methanol production with carbon capture technologies.

• Higher Blends: India is exploring E25, E27, and E30 blends post-2025, with prototypes for E85-compatible vehicles developed.
• Sustainable Aviation Fuel (SAF): A 1% SAF blending target for international flights by 2027 and 2% by 2028 is set, with production already underway at Indian Oils Panipat refinery.
• Biodiesel and Methanol: A formal biodiesel blending mandate (1-2%) is planned within 1-2 years, and renewable methanol is being evaluated for decarbonization.
• Global Leadership: The Global Biofuels Alliance aims to enhance Indias role in biofuel trade and innovation.