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India has announced its ambitious plan to increase ethanol blending in petrol to 27% (E27) by 2030, building upon the successful Ethanol Blended Petrol (EBP) Programme launched in 2003. This move aligns with India’s goals of energy security, environmental sustainability, and rural development.

Background and Progress

• EBP Programme: Started with 5% blending, it has grown from less than 2% a decade ago to 10% (E10) by 2022, with 20% blending (E20) projected for 2025, five years ahead of schedule.
• Ethanol Feedstocks: Primarily derived from sugarcane, maize, and surplus food grains, with an increasing push for second-generation ethanol from crop residues and agricultural waste under PM-JI-VAN Yojana.
• Energy Security: India imports nearly 88% of crude oil, spending over $120 billion annually. Ethanol blending reduces crude imports, conserves foreign exchange, and mitigates vulnerability to global price shocks.
• Environmental Goals: Ethanol blends reduce carbon monoxide and hydrocarbon emissions, supporting the National Green Mobility Strategy and India’s Net Zero 2070 commitment.

Economic and Social Benefits

• Farmer Welfare: The programme has channeled over ?1.2 lakh crore to farmers and nearly ?2 lakh crore to distilleries, providing stable markets for sugarcane, maize, and other crops.
• Rural Development: Ethanol distilleries generate employment, promote agro-industries, and reduce distress migration.
• Circular Economy Link: Second-generation ethanol initiatives convert crop residues and waste into energy, addressing stubble burning and enhancing sustainability.

Challenges and Risks

• Food Security: Rising ethanol demand strains maize and grain supplies. In 2023, a 5-million-tonne maize shortfall forced imports, affecting poultry, starch industries, and food prices.
• Water Use: Sugarcane requires 1,500–2,000 litres of water per kg of sugar, risking groundwater depletion in states like Maharashtra and Uttar Pradesh.
• Technological Issues: Higher blends can reduce fuel efficiency by 6–7% in vehicles not designed for ethanol. Adoption of Flex Fuel Vehicles is slow and more costly.
• Supply-Side Constraints: India produced 7 billion litres of ethanol in 2023 but will require over 12 billion litres by 2030. Financially stressed sugar mills and limited investment in grain-based or second-generation plants challenge scaling.
• Infrastructure Needs: Storage, transport, and fuel dispensing networks must expand nationwide to meet E27 targets.

Policy Recommendations

• Feedstock Diversification: Rapid development of second-generation ethanol from crop residues, forestry waste, and municipal solid waste.
• Consumer Incentives: Subsidies for Flex Fuel Vehicles, retrofitting existing engines, and awareness campaigns to ensure adoption.
• Public–Private Partnerships: Investment and collaboration to scale production, distribution, and technology adoption.
• Integration with Clean Energy Transition: Ethanol should complement electric mobility and green hydrogen, serving as a bridge solution for decarbonisation while more transformative technologies mature.