What lies beyond India’s E20 push
An analysis found that Indian motorists paid an estimated Rs 88,234 crore more in fuel costs over the last three years due to the lower mileage delivered by ethanol-blended (E20) petrol compared to pure petrol.
The mileage loss stems from ethanol's lower energy content relative to petrol, requiring vehicles to burn more fuel to cover the same distance.
The reported forex-savings and emissions benefits of the ethanol programme were flagged as less certain than officially projected, since higher fuel consumption per kilometre can offset both claims.
Concerns were raised that diverting food-grain and sugarcane feedstock toward ethanol production could affect food security and agricultural exports.
The Ethanol Blended Petrol (EBP) Programme and National Policy on Biofuels
The Ethanol Blended Petrol (EBP) Programme, launched in January 2003, mandates blending a specified percentage of ethanol into petrol sold across India. The National Policy on Biofuels, 2018 set an original target of 20% blending (E20) by 2030, which the 2022 amendment to the same policy advanced to Ethanol Supply Year (ESY) 2025-26. India reached the 20% blending milestone in 2025, roughly five years ahead of the original schedule.
Key Details
- Blending levels rose from about 1.1-1.5% in 2014 to 20% by 2025 under the accelerated timeline.
- The programme is administered jointly by the Ministries of Petroleum & Natural Gas, Consumer Affairs/Food & Public Distribution, and Agriculture, given its links to sugar and foodgrain markets.
- Ethanol has a lower calorific (energy) value than petrol, meaning a fixed volume of E20 fuel delivers less energy — and typically fewer kilometres per litre — than pure petrol, even though pump prices may not fully reflect this.
The mileage shortfall reported is a direct consequence of ethanol's lower energy density; because the blending percentage rose faster than public communication of its efficiency trade-off, the cumulative extra cost to consumers became a point of scrutiny only after the E20 rollout was largely complete.
Feedstock Diversification and the Food-Security Trade-off
India's ethanol feedstock base has shifted from being sugarcane-molasses dominated toward grain-based sources, particularly maize and surplus rice released from Food Corporation of India (FCI) stocks, to meet rising blending targets without over-relying on the sugar economy.
Key Details
- Grain-based feedstocks (mainly maize and FCI rice) contributed close to 70% of cumulative ethanol supply in ESY 2025-26, with maize alone the single largest contributor.
- A significant share of India's maize crop — reported at nearly 29% in 2024-25 — has gone toward ethanol production, competing with the poultry, animal-feed, and food-processing sectors that also depend on maize.
- The Ethanol Supply Year (ESY) runs from December to November, distinct from the standard fiscal year, and is the reference period used for tracking blending targets and feedstock-wise contribution.
As grain diversion toward ethanol scales up, the trade-off between energy-security goals (reducing crude oil import dependence) and food-security goals (adequate, affordable grain supply for direct consumption and allied industries) becomes sharper, which is central to the concerns raised about the E20 push.
Forex Savings and Net Emissions: Contested Metrics
The government's principal justifications for the ethanol programme are foreign-exchange savings (by substituting imported crude-linked petrol with domestically produced ethanol) and lower well-to-wheel greenhouse gas emissions (since ethanol is a biofuel). Both benefits are typically calculated on a per-litre-blended basis, without necessarily netting out the higher fuel volumes consumers actually burn due to reduced mileage.
Key Details
- Official statements have cited foreign-exchange savings from ethanol blending exceeding Rs 1.91 lakh crore since the programme's scale-up.
- Emissions benefits are contested because higher fuel consumption (from lower mileage) can offset the inherently lower carbon intensity of ethanol per litre, especially for older vehicles not optimally tuned for E20.
- Vehicles manufactured before 2023 are more likely to show a pronounced mileage drop on E20, as they were not originally calibrated for higher ethanol content, unlike newer "flex-fuel-ready" vehicles.
The core critique is a methodological one: touted savings and emissions gains are computed assuming constant fuel consumption, but real-world mileage loss means both benefits are likely smaller in net terms than officially projected, though not necessarily negative.
- Indian consumers paid an estimated Rs 88,234 crore extra over three years (April 2023–March 2026) due to E20's mileage impact.
- India achieved the 20% ethanol blending (E20) target in 2025, five years ahead of the original 2030 goal set by the National Policy on Biofuels, 2018 (as amended in 2022).
- Grain-based feedstocks (maize and FCI rice) supplied nearly 70% of cumulative ethanol output in ESY 2025-26; maize contributed the largest individual share.
- About 29% of India's maize production was diverted toward ethanol manufacturing in 2024-25.
- Cumulative forex savings attributed to ethanol blending have been officially stated at over Rs 1.91 lakh crore.