How many times have you mentioned your engine complaint in fuel stations?
How deep you aware of your oil fuel? Its types? Benefits ? Consequences?
It has been a decade since there are different versions of bio fuel blending in Indian oil programmes and helpless customers.
Domestic consumption of petroleum products in FY25 was 239.2 MMTPA. Crude oil imports increased by 4.2% to 242.4 MT in FY25 compared to a rise by 9.7 MT from previous year.
The global energy market is a geopolitical influenced volatile commodity. Every nation continuously makes efforts to gain from competitive market pricing. India is not an exemption. The rapid economic growth is pushing India towards more energy supply and alternative fuel strategies to explore.
Electric, natural gas, bio fuels, hydrogen fuel etc programmes are seriously undertaken for government agencies for fuel sovereignty.
Bio ethanol has been in the news since Ethanol Supply Year (ESY) 2014-15. The current Union Road Transport and Highway Minister, Shri. Nitin Gadkari has described Bio-Ethanol as “Fuel of The Future.”
India has set its net zero emissions target for 2070 high and above. As a significant step towards achieving it, bio-ethanol or biofuels are considered core for it.
According to a statement released by the Government, ethanol blending in Petrol by Public Sector Oil Marketing Companies (OMCs) has resulted in savings/conservation of more than Rs.1,44,087 crore of foreign exchange, crude oil substitution of about 245 lakh metric tonnes providing crucial energy security and CO2 emission reduction of approximately 736 lakh metric tonnes, the equivalent of planting 30 crore trees. At 20% blending, it is expected that payment to the farmers in this year alone will be to the tune of Rs.40,000 crore and forex savings will be around Rs. 43,000 crores.”
Biofuel is a type of fuel that is made directly from renewable biomass sources like plants, algae, or animal waste. Examples include E100 (100% pure ethanol) or B100 (100% pure biodiesel). Whenever biofuel is blended with fossil fuels, we call it blended fuel. E10 (10% ethanol and remaining fossil fuel), B20(20% biodiesel and 80% petroleum diesel) are some of the blended fuel examples.
According to the government of India, bio-ethanol is not only an energy transition, but also a national programme to include farmers as a stake holders to improve agrihousehold income.
However, several questions are arising as far as the biofuel or bioethanol program is concerned from key stakeholders.
The first stakeholder is the farmers who are growing sugarcane, maize and other grains which are major feedstocks for ethanol production in India. Government of India claims that bio fuels creates transformative benefits in terms of benefits to the rural economy, elimination of sugarcane arrears and improving the viability of maize cultivation in the country.
However, on field experiences with sugarcane and maize tell a different story. Sugarcane is a water intensive crop, consuming over 22.5 million liters of water per hectare over its long growing cycle. Drought prone areas like Vidharbha in Maharashtra and Uttar Pradesh are putting their water resources at stake.
And GMO maize is taking over fields at a record level. Pressure to increase acreage for sugarcane or maize production will put farmers and the environment under stress. In such regions, increased pesticide, and other chemical usage will pollute water bodies and cause serious health issues for the farmers. Moreover, such intensive monocrop puts essential food grains such as pulses and oil seeds etc cultivation under risk. If necessary measures are not in place.
Another important stakeholder is customers who are using Bio-Ethanol blended fuel. In India, ethanol-blended petroleum programme(EBP) gained significant traction. A study by the NITI Aayog found that the GHG emissions of sugarcane and maize based ethanol are less by 65% and 50%, respectively than those of petrol. Researchers found that combustion of ethanol blended gasoline emits lower amounts of Carbon Monoxide (CO), Hydrocarbons (HC) and Oxides of Nitrogen (NOx).
Before owning the benefits, let’s go deep into customer concerns and government clarifications.
| Type of Claim | Customer Fears | Based on Government clarifications (PRID – 2155558) |
| Life of the Engine | Corrosion, increased wear and tear on fuel pumps and injectors, and degradation of seals and gaskets, etc. | Brazil has been successfully running on E27 for years with zero issues. The same automakers such as Toyota, Honda, Hyundai etc. produce vehicles there too. Moreover, safety standards for E20 are well established through BIS specifications and Automotive Industry Standards. In most parameters including drivability, startability, metal compatibility, plastic compatibility, there are no issues. Only in case of certain older vehicles, some rubber parts and gaskets may require replacement earlier than in case non blended fuel was used. |
| Per Liter Mileage | E20 causes a “drastic” reduction in fuel efficiency. | The use of E-20 gives better acceleration, better ride quality and most importantly, lowered carbon emissions by approximately 30% as compared to E10 fuel. |
| Cost Effectiveness | Why is there no change in fuel price even when bio-Fuels are blended and does the key stakeholder farmer get any benefit in the current scenario. | “In 2020-21, when the Report of NITI Aayog was prepared, Ethanol was cheaper than Petrol. Over time, procurement prices of Ethanol have increased and now the weighted average price of Ethanol is higher than the cost of refined Petrol. Currently, the average procurement cost of Ethanol for Ethanol Supply Year 2024-25, as on 31.07.2025, is Rs.71.32 per litre, inclusive of transportation and GST. For producing E20, OMCs blend 20% of this procured Ethanol with Motor Spirit (MS). Price of C-heavy molasses based Ethanol increased from Rs.46.66 (ESY 2021-22) to Rs.57.97 (ESY 2024-25). The price of maize-based ethanol increased from Rs.52.92 to Rs.71.86 over the same period.” |
| Insurance | If anything happens to the vehicle due to the fuel, does the damage is insured under insurance coverage? | Usage of E20 fuel has no impact on the validity of insurance of vehicles in India. |
| Engine Differentiator at Fuel Stations | Vehicle manufacturers in India are mandated with E20 compliant vehicles manufacturing. How many customers know about the difference between E20 compliant vehicles and a non E20 compliant vehicle? How about old vehicles? | No concurrent answer has been clarified for these questions. In addition, they highlighted Brazil’s successfully running on E27 for years with zero issues |
At a glance, these advantages seem to justify the Indian government’s pace to implement the ethanol blending transition. However, there are critical questions unanswered such as customer awareness, disbursement,etc,. Rolling out such programmes swiftly is a broad daylight customer rights violation.
The answer remains uncertain when Ethanol production too has a fair share of pollution. The report by NITI Aayog estimates that to produce one litre of ethanol from sugar requires about 2860 litres of water.
The Public Sector Oil Marketing Companies (OMCs) earned brand loyalty and public trust for decades. If in case public oil companies failed to to convince their customers, indirectly giving competitive edge to private oil retailers in India. So, the whole idea of saving forex & supporting farmers at risk.
Additionally, ethanol production is known to discharge wastewater known as vinasse. Vinasse is an effluent of alcohol distillation, particularly from sugarcane and starch-based distilleries. It is toxic in nature known to create soil salinization, acidification, and nutrient imbalance due to its high organic and salt content.
Right from raw material sourcing, production of ethanol and in its final stage – blended ethanol, the fuel emits pollutants and has consequences on natural resources. At the juncture, the government statement on bio-ethanol blending concluded with “decisions for beyond 31.10.2026 will involve submission of the Report of the Inter Ministerial Committee, evaluation of its recommendations, stake holder consultations and a considered decision of Government in this regard. That decision is yet to be taken.”
Featured Image: Photo by alexandre saraiva carniato from pexels
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Sources
- https://ibef.org/industry/oil-gas-india
- https://www.ndtv.com/india-news/fuel-of-the-future-nitin-gadkari-doubles-down-in-ethanol-petrol-row-9061081#:~:text=*%20Union%20Minister%20Nitin%20Gadkari%20said%20fuel,the%20ethanol-blended%20petrol%20on%20vehicles%20and%20engines.
- https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1961797
- https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2078518#:~:text=Public%20Sector%20Oil%20Marketing%20Companies,crores%20annually%20to%20the%20farmers.
- https://understand-energy.stanford.edu/energy-currencies/biofuels#:~:text=Biofuels%20are%20an%20energy%20currency,B20)%20in%20regular%20diesel%20engines.
- https://www.nabard.org/auth/writereaddata/tender/1806181128Water%20Productivity%20Mapping%20of%20Major%20Indian%20Crops,%20Web%20Version%20(Low%20Resolution%20PDF).pdf
- https://www.global-agriculture.com/india-region/india-to-begin-gm-maize-trials-in-punjab/#:~:text=July%2020%2C%202025%20GM%20Maize,could%20lead%20to%20widespread%20adoption.
- https://www.sciencedirect.com/science/article/abs/pii/S2452263524000168#:~:text=It%20was%20observed%20that%20intensive,farmers%20in%20obtaining%20food%20security.
- https://www.niti.gov.in/sites/default/files/2021-06/EthanolBlendingInIndia_compressed.pdf
- https://www.sciencedirect.com/science/article/abs/pii/S0016236111007563#:~:text=General%20corrosion%20is%20a%20uniform,a%20corrosion%20product%20%5B9%5D.
