Food Before Fuel: El Niño Hits Crops and India's Ethanol Blending May Fall to About 15%
India's share of ethanol mixed into petrol may fall to about 15% in the 2026-27 Ethanol Supply Year (November 2026 to October 2027), down from the 20% (E20) level reached in 2025.
The reason is a shortage of the crops used to make ethanol. A strong El Niño in 2026 weakened the monsoon (the season ended about 12% below normal), which hurt sugarcane and corn (maize) output.
The government has chosen to protect food supply over fuel. For 2026-27, sugar diversion for ethanol has been set at zero: the oil marketing companies' (OMCs') tender for about 1,100 crore litres of ethanol does not accept ethanol made from sugarcane juice, sugar syrup or B-heavy molasses.
Ethanol can still be made from maize, broken rice, damaged foodgrains, surplus Food Corporation of India (FCI) rice and C-heavy molasses, but the extra incentive for maize-based ethanol has been cut. Retail sugar prices are at record highs, and sugar output may again fall short of domestic demand.
Ethanol Blended Petrol (EBP) Programme
The Ethanol Blended Petrol (EBP) Programme is the Government of India's plan to mix ethanol, a fuel made from plants, into the petrol sold at petrol pumps. "E20" means petrol with 20% ethanol. The programme aims to cut oil imports, help farmers earn more and reduce pollution. Public sector oil marketing companies buy ethanol from distilleries at fixed prices and blend it.
With sugar-based ethanol barred for 2026-27 and maize costly and short, the programme may not find enough ethanol to keep E20 everywhere, so the national average could slip to around 15%.
Food vs Fuel Debate: Biofuels and Food Security
The food vs fuel debate asks one question: should crops and land be used to feed people and animals, or to make fuel for vehicles? When crops like sugarcane, maize and rice are turned into ethanol, less may be left for food and animal feed, and prices can rise. The debate becomes sharp in bad crop years.
Setting sugar diversion to zero and trimming maize incentives in 2026-27 is a clear case of the government choosing food security over its blending target.
El Niño–Southern Oscillation (ENSO)
El Niño–Southern Oscillation, or ENSO, is a natural climate swing in the tropical Pacific Ocean. In an El Niño, the central and eastern Pacific becomes warmer than normal; in a La Niña, it becomes cooler. These changes shift winds and rainfall around the world, including India's monsoon.
The 2026 El Niño reduced rain over cane and maize areas like Maharashtra and Karnataka. Lower crop output left less for both food and ethanol, which is why the blending level may fall.
- Ethanol blending achieved: 20% (E20) in 2025, five years ahead of the original 2030 target
- Likely level for ESY 2026-27: about 15%
- ESY 2026-27: 1 November 2026 to 31 October 2027
- OMC tender: about 1,100 crore litres of ethanol
- Sugar diversion for ethanol in 2026-27: zero (no sugarcane juice, sugar syrup or B-heavy molasses)
- Allowed feedstocks: maize, broken rice, damaged foodgrains, surplus FCI rice, C-heavy molasses
- 2026 southwest monsoon: about 12% below normal
- National Policy on Biofuels: 2018, amended 2022