Government Efforts to Boost Ethanol Blending Beyond 20%

Government Efforts to Boost Ethanol Blending Beyond 20%. The Indian government has been actively working to increase ethanol blending in petrol as part of its effort to reduce dependency on fossil fuels, improve energy security, and promote environmental sustainability. The National Policy on Biofuels – 2018, amended in 2022, set an ambitious target of achieving 20% ethanol blending (E20) in petrol by the Ethanol Supply Year (ESY) 2025-26, advancing it from the earlier target of 2030. This article explores the key government measures to achieve and exceed this target, the benefits of ethanol blending, and the challenges involved.

Government Efforts to Boost Ethanol Blending Beyond 20%

Introduction to Ethanol Blending in Petrol

Ethanol is an eco-friendly biofuel produced from plant-based materials like sugarcane, maize, and agricultural waste. Blending ethanol with petrol helps reduce greenhouse gas emissions and dependence on imported crude oil.

Why Ethanol Blending Matters

• Reduces air pollution – Ethanol burns cleaner than petrol, reducing harmful emissions like carbon monoxide and hydrocarbons.
• Enhances energy security – Reduced dependency on imported crude oil strengthens India’s energy security.
• Supports farmers – Ethanol production creates an additional source of income for farmers.
• Promotes rural economy – Ethanol production encourages investment in rural infrastructure and biofuel plants.

Government’s Ethanol Blending Achievements

The government has made significant progress in ethanol blending over the last few years:

• 10% ethanol blending – Achieved in June 2022, five months ahead of target (ESY 2021-22).
• 12.06% ethanol blending – Achieved in ESY 2022-23.
• 14.60% ethanol blending – Achieved in ESY 2023-24.
• 17.98% ethanol blending – Achieved up to 28th February 2025 (ESY 2024-25).

Next Goal: Achieving 20% Blending by 2025-26

• The target for 20% ethanol blending (E20) in petrol by ESY 2025-26 is expected to significantly reduce India’s dependence on crude oil imports and enhance environmental benefits.

Key Government Measures to Boost Ethanol Blending

The government has implemented various strategic measures to accelerate ethanol production and blending:

1. Expanding Feedstock for Ethanol Production

The National Policy on Biofuels allows the use of various feedstocks for ethanol production, including:

• Sugarcane juice and molasses
• Maize and corn
• Damaged food grains (e.g., broken rice, rotten potatoes)
• Agricultural residues (e.g., rice straw, corn cobs, bagasse)
• Cassava and sawdust

This ensures a steady supply of raw materials and reduces waste.

2. Administered Price Mechanism

• The government has implemented an administered price mechanism for ethanol procurement under the Ethanol Blending Programme (EBP).
• This ensures that ethanol producers receive a fixed price, encouraging more production and investment.

3. Lowering GST on Ethanol

• The Goods and Services Tax (GST) rate on ethanol for the EBP Programme has been lowered to 5%.
• This reduces production costs and boosts profitability for ethanol producers.

4. Simplified Procurement Process

• The government has streamlined the ethanol procurement process by Public Sector Oil Marketing Companies (OMCs).
• This ensures faster and more efficient procurement of ethanol from producers.

5. Policy Incentives and Financial Support

• The government introduced the Ethanol Interest Subvention Scheme (EISS) during 2018-22.
• Under this scheme, interest subvention was provided for setting up ethanol plants using both molasses and grains.
• Public Sector Oil Marketing Companies (OMCs) have signed Long Term Offtake Agreements (LTOAs) with Dedicated Ethanol Plants (DEPs) to ensure consistent supply.

6. Amendment of the Industries (Development and Regulation) Act

• The Act was amended to facilitate the intra-state and inter-state movement of ethanol.
• This simplifies the supply chain and ensures better availability across the country.

Impact of Ethanol Blending on Vehicles

Reduction in Fuel Efficiency

• According to the Roadmap for Ethanol Blending in India 2020-25, using E20 (20% ethanol-blended petrol) may lead to a marginal reduction in fuel efficiency for vehicles designed for E10 (10% ethanol-blended petrol).
• However, the Society of Indian Automobile Manufacturers (SIAM) has reported that with modifications in engine hardware and tuning, the loss in efficiency can be minimized.

Vehicle Performance and Durability

• The inter-ministerial committee found no major issues with engine performance, wear of engine components, or engine oil deterioration with E20 fuel.
• This indicates that Indian vehicles are gradually adapting to higher ethanol blends.

Challenges in Increasing Ethanol Blending Beyond 20%

While the government has made significant progress, increasing ethanol blending beyond 20% comes with certain challenges:

1. Limited Availability of Raw Materials

• Sugarcane and maize are key raw materials for ethanol production.
• Over-reliance on these crops may lead to food security issues and price volatility.

2. Infrastructure and Technology Gaps

• Ethanol production plants need modern infrastructure and advanced technology to handle higher blending levels.
• Investment in distilleries and ethanol storage is essential for scaling up production.

3. Impact on Older Vehicles

• Vehicles designed for lower ethanol blends (E10) may face performance issues with E20 or higher blends.
• Manufacturers need to develop engines compatible with higher ethanol content.

4. Regulatory and Market Challenges

• Pricing policies, taxation, and market dynamics affect ethanol production and blending rates.
• The government needs to maintain a stable policy environment to attract private investment.

Future Outlook

• The government is focused on achieving 20% ethanol blending by 2025-26 and exploring possibilities for higher blends beyond that.
• The National Policy on Biofuels encourages the use of second-generation (2G) biofuels, which use agricultural waste and non-food crops, to reduce pressure on food crops.
• Development of flex-fuel vehicles (FFVs) that can run on higher ethanol blends will further support the ethanol blending program.

Conclusion

India’s ethanol blending program is a game-changer for the country’s energy security and environmental sustainability. The government’s proactive measures, including policy support, financial incentives, and infrastructure development, have accelerated progress toward the 20% blending target. However, scaling ethanol blending beyond 20% will require addressing challenges related to raw material availability, infrastructure, and vehicle compatibility. With the right policy framework and technological advancements, India is well on track to becoming a global leader in biofuels.

Tags: Ethanol Blending, E20 Fuel, Biofuels, Renewable Energy, Government Policies, Energy Security, Ethanol Production