India’s Ethanol Blending Strategy Explained

In the 2020-21 fiscal year, India’s net petroleum import was 185 metric tonnes. Currently, 85% of India’s oil needs are being fulfilled through imports. This import comes at a huge price tag of US $ 55 billion and this is where E20 fuel comes into the picture. E20 fuel is a blend (mixture) of 20% ethanol with petrol. This fuel can save Rs. 30000 cr per annum (the US $ 4 billion). If we talk from the environmental side, ethanol is less polluting than petrol.

High starch and sugar content food crops like corn, barley, sugar cane, sorghum produce ethanol. Every year India produces millions of tonnes of food grains. This makes the country self-reliant in ethanol production. India is planning to reach the target of 20% blending of petrol by 2025. Oil companies are slowly changing their equipment for ethanol distillation. Automobile companies are also planning to start the production of ethanol-based vehicles.

How Ethanol Percentage is represented?

Alphabet “E” is to describe the percentage mixture of ethanol and fuel. For example, E70 means the mixture contains 70% of anhydrous ethanol and 30% of petrol. Internationally, E5 to E25 ethanol – petrol mixtures are considered low-ethanol blends. Around 20 other countries are using low-ethanol blends (E10 or less). The USA and Europe are using E85 ethanol blend petrol.

common ethanol fuel mixture

How is Ethanol Produced?

Ethanol is a biofuel. It is produced using fermentation. Ethanol production units use yeast and ferment the starch/sugars present in the crops like sugar cane, corn etc. The United States uses corn for most of its ethanol production.

Cellulose in the plants can also be used to produce ethanol. But the cellulosic ethanol production is complex and not cost-effective. By breaking down cellulose in plant fibre, manufacturers can produce ethanol from any kind of plant or tree. Click here for more information on ethanol production.

Ethanol for High Octane Rating

Ethanol offers a high octane number when compared with petrol. That’s the reason why petrol is usually blended with E10 ethanol. Various grades of petrol offer octane ratings ranging between 87 to 94 but not more than that. But on the other hand, the octane rating of ethanol is 113. High octane rating is good for automobile engines. Currently, most of the auto manufacturers use E10 blend petrol, which requires no extra engine modifications. This is the main reason auto manufacturers are changing their plans to produce engines compatible with E20 blend fuels.

The Present Situation

Currently, India is producing 426 crore litres from molasses-based distilleries. Grain-based distilleries producing 256 cr lit. By 2025, it is expected to expand both types of production to 760 and 740 cr lit respectively. To reach this target, India needs 60 lakh metric tonnes of sugar and 165 lakh metric tonnes of grains per year.

EBP programme performace

The Ministry of Petroleum and Natural gas laid out a target to produce 10% ethanol blending fuel by April 2022. Ethanol blended fuel is not good for current automobile engines. It reduces their efficiency. That’s why auto manufacturers need to build engines suitable for blended ethanol. When it comes to price, yes they are going to be a bit at a higher level. E20 compatible 4 wheelers may cost Rs. 3000 to Rs. 5000 more than present models. When coming to 2 wheeler it is going to Rs.1000 to Rs. 2000 higher than ordinary ones.


The Cabinet Committee for Economic Affairs (CCEA) decides the price of ethanol produced from sugarcane. On the other hand, prices for the ethanol that is produced from food grains will be controlled by marketing companies (OMCs).

Raw material Source Ex-mill Ethanol Price 

B-Heavy – Rs. 57.61/lit

C-Heavy molasses – Rs.45.69/lit

Sugar/Sugar Syrup – Rs. 62.65/lit

Damaged Food Grains/ Maize – Rs. 51.55/lit

Surplus Rice (FCI) – Rs. 56.87/lit

With added GST and excise duty, the cost of ethanol-blended fuel may cost more than normal petrol. In such scenarios, tax (GST) breaks are necessary to reduce the pricing.

Impact on Environment

India has regulations for carbon monoxide (CO), hydrocarbons (HC), and nitrogen oxides (NOx) emissions. These emissions can be further reduced if ethanol-blend gasoline is used. Ethanol blended petrol is good for air but not for groundwaters. Let’s see how.

Sugarcane is a high-water-use crop. One tonne of sugarcane produces 100 kg of sugar and 70 litres of ethanol on average. Each kilogram of sugar requires 1600 to 2000 gallons of water for cultivation. That means, one litre of sugar ethanol takes approximately 2860 litres of water. That’s a lot of water. Isn’t it? Estimations say that sugarcane and paddy utilise 70 per cent of the country’s irrigation water. It is better to addin less water consuming crops to sugarcane fields.


  1. Floods and droughts can have an impact on the crop.
  2. In India, around half of all pump nozzles provide just E0.
  3. Ethanol mixing takes place in various parts of the country. Logistics and transportation are going to be challenging.
  4. Additional ethanol storage tanks are required at marketing ports and depots.
  5. Dispensing units that are ethanol compatible are required.
  6. Nozzle calibration and legal metrology should be changed.
  7. For ethanol mixed gasoline delivery at retail outlets, there will be a need for an extra underground tank, pipes/hoses, and dispensing equipment.
  8. Auto manufacturers should make deals with vendors who can make ethanol compatible parts.
  9. Engines should be optimized for performance.
  10. Durability tests on engines and field trials should be conducted on E20 compatible engines.


Ethanol blending petrol definitely can save the government a lot of money from imports. Production and implementation involve a lot of challenges. Ethanol blend petrol can decrease pollution. It doesn’t do any good for petrol consumers because the price of ethanol petrol will be more or less equal to normal petrol. Not only that, this fuel can increase the cost of automobiles by a few thousand bucks. I hope you understood India’s ethanol blending strategy. If you like our content, do not forget to follow us

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