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Ethanol Blending


Global transportation sector is facing three major challenges, namely depletion of fossil fuels, volatility in crude oil prices and stringent environmental regulations. Alternative fuels specific to geographies can address these issues. Ethanol is considered to be one of most suitable alternative blending, transportation fuel due to its better fuel quality (ethanol has a higher octane number) and environmental benefits.

Our nation's energy demand is increasing due to a growing economy, population, urbanisation, changing lifestyles, and rising purchasing power. Approximately 98% of the road transportation sector's fuel demand is currently met by fossil fuels, while the remaining 2% is met by biofuels. Today, India imports 85 percent of its oil needs. Despite temporary setbacks caused by the COVID pandemic, it is anticipated that the Indian economy will grow steadily. This would lead to an increase in the number of vehicles on the road, which would further increase the demand for transportation fuels.

The National Policy on Biofuels – 2018 sets a target of 20% ethanol blending in the Ethanol Blended Petrol (EBP) Programme by 2030. Wherever it is available, various Oil Marketing Companies (OMCs) in India are currently selling fuel with a 10% ethanol content (E10). However, because there is insufficient ethanol available, only about half of the fuel sold is E10-blended, while the rest is unblended fuel (E0).

What is Ethanol?

Ethyl alcohol is the organic compound that is produced from biomass. Additionally, it is a component of alcoholic beverages. It has a higher octane number than gasoline, hence improves the petrol octane number. Ethanol contains a negligible amount of water.

Since ethanol contains oxygen, it should aid in the complete combustion of fuel, thereby reducing emissions.

National Biofuel Policy, 2018

Government has emphasised on achieving energy security of the country with a target of reducing import dependence i.e. usage of fossil fuels.

The growing concern about the import dependence for fuel requirement in tandem with environmental pollution issues have driven the need for alternative fuels that have superior environment benefits and are economically competitive with fossil fuel. This envisages a strategic role for biofuels in the Indian Energy basket.

These resources, which can be converted into biofuels, include agricultural and forest residues, municipal solid waste (MSW), and cow dung, among others.

The government is committed to using these to reduce our dependence on crude oil imports, save foreign exchange, provide better remuneration for farmers to double their income, address growing environmental issues due to fossil fuels and burning biomass/waste, and promote the "Make in India" campaign.

2G Biofuel

With an objective to augment ethanol supplies, the Government allowed procurement of ethanol produced from other non-food feedstock besides molasses, like cellulosic and lignocellulosic materials including petrochemical route.

The government also launched "Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana" to provide viability gap funding to create 2G ethanol capacity in the country and attract investment in this sector.

Amendment made to the policy

The Union Cabinet has approved amendments to the National Policy on Biofuels, 2018, to advance the date by which fuel companies have to increase the percentage of ethanol in petrol to 20%, from 2030 to 2025. The policy of introducing 20% ethanol will take effect from April 1, 2023.


A 10% blend of fuel does not necessitate significant engine modifications, whereas a 20% blend may necessitate modifications and even increase vehicle prices.

Issues Related with Biofuels

  • Hunger Risk- Food grains intended for the poor are being sold to distilleries at prices lower than what states pay for their public distribution networks.

  • Cost- Because biofuel production requires land, the cost of biofuels and food crops is affected.

  • Water consumption- Massive amounts of water are required for proper irrigation of biofuel crops as well as the manufacture of the fuel, which could put a strain on local and regional water resources. A higher percentage of blending could also result in more land being diverted to water-intensive crops such as sugar cane, which is currently subsidised by the government.

  • Efficiency- Fossil Fuels produce more energy than some of the biofuels. E.g. 1 gallon of ethanol produces less energy as compared to 1 gallon of gasoline (a fossil fuel).


Immense benefits can accrue to the country by 20% ethanol blending by 2025, such as saving Rs 30,000 crore of foreign exchange per year, energy security, lower carbon emissions, better air quality, self-reliance, use of damaged foodgrains, increasing farmers' incomes, employment generation, and greater investment opportunities. There is a need to develop a long-term strategy. To chart a course forward, policymakers, economists, and environmentalists must weigh the pros and cons.


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