E20 petrol is going nowhere; govt is looking to blend more
The talks—still at an early stage—follow calls from sugar industry leaders for a clear roadmap on ethanol use, given its overcapacity in production.
NEW DELHI : The Centre has opened discussions on whether India should move to higher ethanol blends in petrol from the current E20 (20% ethanol, 80% petrol), two people aware of the matter said, amid continuing consumer unease over the current E20 blend.
According to the first person, who spoke on condition of anonymity, the government is of the view that higher blends—such as E23 and E27—as well as flex-fuel vehicles should be explored, and discussions have begun towards testing feasibility. Notably, flex-fuel vehicles can operate on any proportion of blended fuel, including 100% ethanol.
“There are discussions ongoing among relevant ministries along with industry to see how more ethanol blending can be achieved," the second person said.
The talks—still at an early stage—follow calls from sugar industry leaders for a clear roadmap on ethanol use, given its overcapacity in production. Only 10.5 billion litres of the industry’s 19 billion litres capacity is being utilised by oil marketing companies for blending in petrol, the Indian Sugar Mills Association (ISMA) said at an industry event on 4 December.
On the other hand, auto executives say there is consensus among industry stakeholders that the country should stabilise the use of E20 for some time and then leapfrog into flex-fuel vehicles.
“It is very difficult to go beyond E20 because the impact on legacy vehicles will have to be seen," Vikram Gulati, Toyota’s country head and executive vice president for corporate affairs and governance, said at a media briefing on 4 December, adding that one can’t keep redesigning and retesting vehicles for incremental increases beyond E20, nor ignore the existing legacy fleet.
“Therefore, globally what is seen is, after you reach a stage, let us say 20 in the case of India, you stabilize that and you use flex-fuel vehicles," Gulati said.
Earlier, the government's mandate on using E20 petrol in all vehicle segments—effected in April 2025—created a consumer outcry, as this blend allegedly resulted in declining vehicle efficiency and mileage drops.
Amid the uproar, the Centre informed the Parliament in March that as per its analysis, ethanol blending has not impacted vehicle performance, and no decision has been taken so far to enhance blending of the biofuel beyond 20%.
Emailed queries sent on 9 December to the ministries of petroleum and natural gas (MoPNG), ministry of road transport and highways (MoRTH), ministry of heavy industries (MHI), and the Society of Indian Automobile Manufacturers (Siam) remained unanswered till press time.
Why blend ethanol
Beyond stakeholder debates, the government has maintained that blending ethanol in fuel will reduce India’s dependence on fuel imports, and generate income for the country’s farmers. India paid an import bill of $137 billion to bring in 234 million tonnes of crude oil in FY25, according to data from petroleum planning and analysis cell.
As per estimates by Siam and the Federation of Indian Petroleum Industry (FIPI), as well as vehicle testing agency Automotive Research Association of India (ARAI), approximately ₹1.44 trillion ($16 billion) worth of foreign exchange has been saved, and 24.5 million metric tonnes of crude oil substituted, in the past 11 years since the ethanol blending programme started.
What about flex-fuel vehicles
Flex-fuel vehicles have operated in other countries for a long time now, suggesting that higher blends of ethanol have worked successfully in automotive engines, said Abhay Chaudhari, managing director of MEDAS ENGGDESIGN Pvt. Ltd, an engineering solutions company that works with ethanol-related products.
“In other countries such as Brazil, Thailand, and even the US, flex-fuel vehicles have operated. But the hurdle in India has historically been the compatibility of automotive technology," he said.
To incentivise introduction of flex-fuel vehicles, Toyota and the sugar industry are pitching for tax relief on such vehicles.
“Flex fuel is perhaps the most important ecosystem," Deepak Ballani, director general at ISMA, told the media during the 4 December industry event. “I believe this is the mobility solution which is perhaps the most important in terms of carbon emission reduction."
To be sure, India achieved its ethanol blending targets ahead of schedule, but the time required by vehicle makers to make fuel systems compliant with the qualities of blended fuels caused delays in making E20 an industry-wide norm. While it was earlier planned that the country will reach 20% blending by 2030, it was only achieved in 2024.
India has also pushed for more biofuel production on the global stage. The world’s most populous nation has backed the Belém Commitment for Sustainable Fuels, known as Belém 4x, a proposal by Brazil in October, ahead of the recent COP30 summit.
Belem 4x calls for the worldwide adoption of clean energy sources including biofuels such as ethanol to replace traditional fossil fuels and reduce carbon emissions from the transportation and energy sectors. As per the pledge, the use of sustainable fuels will be quadrupled by 2035.
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