The Indian Council for Research on International Economic Relations said the government should reduce the ethanol blending mandate to E15 when there are supply constraints, arguing that a temporary cut would protect fuel availability and avoid disruption to the wider petroleum supply chain. The think tank recommended that blending targets be calibrated to seasonal and regional variations in feedstock availability rather than applied uniformly across the country. The advice sought to balance objectives of energy security, rural incomes and food supply.

ICRIER highlighted that ethanol supply depends on sugarcane and other feedstocks and can fluctuate with harvest cycles, weather and processing capacity, which may leave refiners and oil marketing companies unable to meet higher blending obligations. A temporary easing to E15 would reduce the risk of fuel shortages at pumps and allow market adjustments without reversing the long term goal of higher ethanol adoption. The move would also give ethanol producers time to align production and logistics with demand.

The think tank suggested that the government adopt a flexible regulatory framework that permits downward adjustment of blending mandates in response to verified supply constraints while maintaining incentives for increased production. Such a framework would preserve investor confidence by signalling predictable rules and could be coupled with measures to improve storage and distribution. Policymakers would need to monitor stocks and procurement data closely to trigger any adjustment.

ICRIER recommended complementary measures including building strategic buffer stocks of ethanol, strengthening linkages between sugar mills and distilleries and accelerating research into second generation ethanol technologies to reduce reliance on food crops. It proposed inter ministerial coordination to ensure that energy, agriculture and industry policies work together and that consumer prices and domestic fuel security remain protected. The approach aimed to sustain the long term blending roadmap while managing short term supply risks.