Government Initiatives to Boost Ethanol Blending Beyond 20%

21 Mar 2025 CW Team

Steady Progress in Ethanol Blending The Public Sector Oil Marketing Companies (OMCs) surpassed the 10% ethanol blending target in June 2022, five months ahead of schedule. Ethanol blending has steadily increased over the years: 12.06% in ESY 2022-23 14.60% in ESY 2023-24 17.98% in ESY 2024-25 (as of 28th February 2025). As of now, no decision has been taken to increase ethanol blending beyond 20%.

Impact of E20 on Vehicle Performance According to the Roadmap for Ethanol Blending in India (2020-25), using E20 fuel leads to a marginal reduction in fuel efficiency for vehicles originally designed for E10 fuel. However, the Society of Indian Automobile Manufacturers (SIAM) has noted that engine modifications can mitigate this efficiency loss. Testing has shown no major issues with engine performance, component wear, or oil degradation when using E20 fuel.

Expanding Feedstock for Ethanol Production The National Biofuel Coordination Committee permits the use of surplus food grains for ethanol production. Key feedstock sources include:

Sugarcane derivatives: Molasses, sugarcane juice Food grains: Maize, broken rice, surplus grains Agricultural residues: Rice straw, cotton stalk, bagasse, corn cobs, sawdust The utilisation of specific feedstocks is calibrated annually based on availability, cost, market demand, and policy incentives.

Government Measures to Promote Ethanol Production: Since 2014, the government has implemented several initiatives to scale up ethanol production under the Ethanol Blended Petrol (EBP) Programme: Expansion of feedstock sources for ethanol production. Administered pricing mechanism for ethanol procurement. Reduction of GST on ethanol to 5% under the EBP Programme. Eased interstate and intrastate ethanol movement through amendments to the Industries (Development and Regulation) Act. Simplified procurement process by OMCs. Advancement of the 20% ethanol blending target from 2030 to ESY 2025-26. Introduction of Ethanol Interest Subvention Schemes (EISS) (2018-22) to promote ethanol production from both molasses and grains. Long-Term Offtake Agreements (LTOAs) between OMCs and Dedicated Ethanol Plants (DEPs).

These measures are designed to encourage ethanol producers and farmers while ensuring a sustainable transition to higher ethanol blending levels in India's fuel mix.

This update was provided by Minister of State for Petroleum and Natural Gas, Shri Suresh Gopi, in a written response to the Lok Sabha today.

The Indian government has made significant strides in enhancing ethanol blending in petrol, advancing the target for 20% ethanol blending (E20) to Ethanol Supply Year (ESY) 2025-26—five years earlier than originally planned under the National Policy on Biofuels – 2018 (amended in 2022). Steady Progress in Ethanol Blending The Public Sector Oil Marketing Companies (OMCs) surpassed the 10% ethanol blending target in June 2022, five months ahead of schedule. Ethanol blending has steadily increased over the years: 12.06% in ESY 2022-23 14.60% in ESY 2023-24 17.98% in ESY 2024-25 (as of 28th February 2025). As of now, no decision has been taken to increase ethanol blending beyond 20%. Impact of E20 on Vehicle Performance According to the Roadmap for Ethanol Blending in India (2020-25), using E20 fuel leads to a marginal reduction in fuel efficiency for vehicles originally designed for E10 fuel. However, the Society of Indian Automobile Manufacturers (SIAM) has noted that engine modifications can mitigate this efficiency loss. Testing has shown no major issues with engine performance, component wear, or oil degradation when using E20 fuel. Expanding Feedstock for Ethanol Production The National Biofuel Coordination Committee permits the use of surplus food grains for ethanol production. Key feedstock sources include: Sugarcane derivatives: Molasses, sugarcane juice Food grains: Maize, broken rice, surplus grains Agricultural residues: Rice straw, cotton stalk, bagasse, corn cobs, sawdust The utilisation of specific feedstocks is calibrated annually based on availability, cost, market demand, and policy incentives. Government Measures to Promote Ethanol Production: Since 2014, the government has implemented several initiatives to scale up ethanol production under the Ethanol Blended Petrol (EBP) Programme: Expansion of feedstock sources for ethanol production. Administered pricing mechanism for ethanol procurement. Reduction of GST on ethanol to 5% under the EBP Programme. Eased interstate and intrastate ethanol movement through amendments to the Industries (Development and Regulation) Act. Simplified procurement process by OMCs. Advancement of the 20% ethanol blending target from 2030 to ESY 2025-26. Introduction of Ethanol Interest Subvention Schemes (EISS) (2018-22) to promote ethanol production from both molasses and grains. Long-Term Offtake Agreements (LTOAs) between OMCs and Dedicated Ethanol Plants (DEPs). These measures are designed to encourage ethanol producers and farmers while ensuring a sustainable transition to higher ethanol blending levels in India's fuel mix. This update was provided by Minister of State for Petroleum and Natural Gas, Shri Suresh Gopi, in a written response to the Lok Sabha today.

Building Material

11 Dec 2025

Suraj Estate Wins Euromoney Award for India’s Best Residential Developer

"Suraj Estate Developers Limited has received the Euromoney Real Estate Award 2025 for ‘India’s Best Residential Developer’, positioning the company among globally benchmarked leaders in the sector. The recognition reflects its four-decade legacy in delivering high-quality residential and redevelopment-led projects across South Central Mumbai. The Euromoney Real Estate Awards, presented by the London-based Euromoney magazine, are widely regarded as one of the most credible global assessments of performance in real estate, banking and finance. Winners are selected through surveys of inte..

Building Material

11 Dec 2025

Lloyds Metals, Tata Steel Sign MoU to Explore Strategic Collaboration

"Lloyds Metals and Energy Limited has signed a non-binding Memorandum of Understanding with Tata Steel Limited to evaluate potential areas of strategic cooperation across mining, logistics, pelletisation and steelmaking. The MoU was signed by B Prabhakaran, Managing Director of Lloyds Metals, and Mr T V Narendran, CEO and Managing Director of Tata Steel. The partnership framework aims to leverage the natural operational synergies between both companies and assess opportunities in greenfield steel projects, iron ore mining, slurry pipeline infrastructure, pellet manufacturing in iron ore–ric..

Building Material

11 Dec 2025

IndiaAI, Gujarat Govt Host Regional Conclave Ahead of 2026 AI Summit

The IndiaAI Mission under the Ministry of Electronics and Information Technology, along with the Government of Gujarat and IIT Gandhinagar, convened a Regional Pre-Summit Event at Mahatma Mandir, Gandhinagar. The initiative is part of the build-up to the India–AI Impact Summit 2026, scheduled for 15–20 February 2026 at Bharat Mandapam, New Delhi. The conclave brought together senior policymakers, technology leaders, researchers and industry practitioners to examine how AI can accelerate economic, digital and social transformation across sectors. The programme focused on the overarching th..