India, Ethanol and Biofuel: My friend recently shared with me his problem related to his car, the mileage had significantly reduced by more than 25-30%, and he was confused and had to visit the service centre, where they said it’s due to E20 (ethanol) blended petrol. This personal anecdote led me to explore the broader controversy surrounding ethanol blending in petrol, which has sparked debates across India.

In 2021, the Government of India announced it would move to 20% ethanol blending in petrol by 2025 with the two-pronged goal of cutting carbon emissions and reducing the country’s dependence on foreign oil. While vehicles modified to be compatible with the new composition started rolling out in April 2025, the government’s push for 20% ethanol-blended petrol (E20) has left vehicle-owners worried about the impact on their older vehicles and about a surge in maintenance costs.

The controversy has intensified with allegations against Indian Union Minister for Road Transport and Highways for  allegedly doing “aggressively lobbying” for the ethanol blending policy, claiming a clear conflict of interest as his close blood-relatives are associated with major ethanol suppliers that have seen explosive growth amid the policy’s rollout. These claims have been dismissed by the ruling party, but they continue to fuel public skepticism.

Explaining ethanol blending and its Indian context

Ethanol blending involves mixing ethanol, a biofuel derived from renewable sources like sugarcane, corn, damaged grains, or agricultural waste with conventional petrol to create a hybrid fuel that burns cleaner and reduces reliance on fossil fuels. In simple terms, E20 fuel consists of 20% ethanol and 80% petrol, building on earlier blends like E5 (5% ethanol) and E10 (10% ethanol). Ethanol is an alcohol that adds oxygen to the fuel mix, helping it burn more completely, but it has a lower energy content than pure petrol and can attract water, which affects how engines perform over time.

In the Indian context, ethanol blending isn’t new – it dates back to 2003 when the Ethanol Blended Petrol (EBP) Programme was launched with a modest 5% blending target in nine states and four union territories. Progress was slow initially, with blending rates averaging just 0.1-1.5% until 2013-14 due to supply shortages, pricing issues, and limited distillery capacity. However, post-2014 reforms including fixed pricing for ethanol, interest subvention schemes for new distilleries, and long-term offtake agreements with oil marketing companies transformed the landscape.

By June 2022, India achieved 10% blending nationwide, ahead of schedule, and by March 2025, it hit the 20% target five years early. Today, India’s ethanol production capacity stands at 1,810 crore litres annually, up from 421 crore litres in 2013, with 499 distilleries operating across states like Maharashtra (396 crore litres capacity), Uttar Pradesh (331 crore litres), and Karnataka (270 crore litres). This expansion has been driven by diverse feedstocks, including molasses from sugarcane and grains like rice and maize, making ethanol a key pillar of India’s energy security strategy.

Why the government pushed for E20?

The government’s aggressive push for E20 stems from a combination of strategic, economic, and environmental imperatives. Primarily, India imports over 85% of its crude oil, making it vulnerable to global price volatility and supply disruptions, E20 helps substitute imported fuel with domestically produced ethanol, saving billions in foreign exchange. For instance, the programme has already displaced 181 lakh metric tons of crude oil and saved over Rs 1.40 lakh crore in import bills since 2014.

Secondly, E20 aligns with India’s climate commitments under the Paris Agreement and its net-zero goals by 2070, as ethanol blending reduces greenhouse gas emissions through better combustion and biogenic carbon cycles. The government views it as a “two-pronged” solution: cutting tailpipe pollution in the short term while transitioning to renewables.

Additionally, it supports rural economies by providing a stable market for surplus agricultural produce, channeling Rs 1.20 lakh crore to farmers and creating jobs in the sugar and distillery sectors. Policies like the Pradhan Mantri JI-VAN Yojana promote advanced biofuels, and the Global Biofuels Alliance (launched during India’s G20 presidency in 2023) positions the country as a leader in sustainable energy. Critics argue the push was rushed without adequate consumer safeguards, but officials maintain it’s essential for energy independence amid rising global oil demands.

Benefits of Ethanol Blending

The advantages of E20 extend across multiple fronts, making it a cornerstone of India’s sustainable energy policy.

• Economic gains: By reducing crude imports, the programme enhances energy security and stabilizes fuel prices. Cumulative savings have exceeded Rs 1.40 lakh crore, with ethanol procurement boosting rural incomes by over Rs 1.20 lakh crore paid directly to farmers. It has also helped manage sugar surpluses, preventing market crashes for sugarcane growers.

• Environmental improvements: Ethanol’s oxygen-rich composition reduces carbon monoxide emissions by up to 50% in two-wheelers and 30% in four-wheelers, according to Central Pollution Control Board studies. Overall, the initiative has cut CO2 emissions by 544 lakh metric tons, contributing to cleaner air in polluted urban areas.

• Agricultural and employment boost: The policy has encouraged crop diversification and supported over 499 distilleries, creating jobs in rural processing units while utilizing “damaged” or surplus grains that might otherwise go to waste.

These benefits have been validated by government roadmaps and international comparisons, such as Brazil’s successful ethanol programme.

Problems with E20 Implementation

While the policy has merits, its rollout has exposed significant challenges, particularly for everyday vehicle owners.

• Mileage reduction: Ethanol’s lower energy density means vehicles burn more fuel for the same distance, government estimates suggest a 1-2% drop for E20-optimized four-wheelers and 3-6% for others, but real-world reports indicate 6-8% average losses, with some older models seeing up to 20% declines.

• Engine compatibility issues: E20’s corrosive nature can degrade rubber components, fuel lines, and plastic parts in non-compatible vehicles, leading to leaks, clogs, and rust. Owners report more frequent repairs, with fuel injectors needing attention sooner.

• Increased maintenance costs: Service intervals may shorten, with components like gaskets requiring replacement every 20,000-30,000 km, adding to annual expenses. A August 2025 survey by Local Circles found 28% of older vehicle owners experiencing unusual wear.

• Starting and performance glitches: Cold starts become harder in winter, and drivability can suffer due to improper air-fuel mixtures in uncalibrated engines.

Older engines, especially those pre-April 2023, face the brunt of E20’s challenges. Materials in fuel systems like rubber seals and metal tanks weren’t designed for ethanol’s solvency, leading to faster degradation and potential failures. Engine knocking, reduced power, and higher emissions can occur without proper calibration, as ethanol alters combustion characteristics. For instance, TVS Motors has warned that upgrades may be necessary for legacy two-wheelers.

Is it long-term Sustainable for Automobile Industry?

For long-term engine sustainability, E20 is viable for newer vehicles built to BS-VI standards with E20-compatible materials (introduced April 2023) and full calibration (from April 2025), which include upgraded elastomers, corrosion-resistant alloys, and optimized ECUs. These engines undergo rigorous testing for durability, showing no significant long-term issues in controlled studies, with potential for even higher compression ratios that improve efficiency and power output.

The Automotive Research Association of India (ARAI) reports minimal efficiency drops (1-6%) and no major wear after extended use in compliant vehicles. However, for older engines, sustainability is questionable repeated exposure can accelerate corrosion of rubber and plastic components, potentially shortening engine life by 10-20% without retrofits, leading to issues like injector clogging, fuel pump damage, and reduced lubrication over time.

The future impact on the automobile industry is transformative: manufacturers are shifting to flexible-fuel vehicles (FFVs) capable of higher blends like E85, driving innovation in materials science and engine design. This could boost India’s auto exports by aligning with global green standards, but it may increase production costs by 5-10% initially, passed on to consumers.

The industry faces pressure to phase out non-compliant models, potentially accelerating EV adoption as a cleaner alternative, while creating opportunities for retrofit markets and biofuel-compatible components. Overall, E20 pushes the sector toward sustainability, but legacy fleet challenges could slow adoption unless addressed through incentives.

What is its Environmental Impact and Is it really viable?

E20’s environmental impact is mixed: positively, it reduces tailpipe emissions, cutting CO2 by 544 lakh metric tons and improving urban air quality through lower particulates and hydrocarbons.

However, viability is debated due to upstream impacts, sugarcane-based ethanol requires massive water (2,100 liters per kg of biomass), exacerbating groundwater depletion in states like Maharashtra. Land use for feedstock crops can lead to deforestation and biodiversity loss, and the “food vs fuel” dilemma diverts arable land from edibles, potentially affecting food security. Lifecycle analyses show net GHG reductions only if feedstocks are sustainable; otherwise, emissions from farming and transport can offset gains.

Is it really viable? Yes, in the medium term for energy security, but long-term viability depends on shifting to second-generation (non-food) ethanol from agricultural waste, which minimizes water and land issues. Critics argue it’s a bridge solution at best, less efficient than direct electrification, but government projections see it as scalable with tech advancements.

Process in making Ethanol and its Impact

Ethanol production in India follows a multi-step process: first, feedstock preparation – sugarcane is crushed for molasses or grains are milled; then fermentation, where yeasts convert sugars to alcohol in large vats over 24-72 hours; followed by distillation to purify the ethanol to 95-99% concentration; and finally dehydration to make it fuel-grade. Grain-based processes add enzymatic hydrolysis to break starches into sugars before fermentation.

Environmentally, this process is water-intensive each liter of ethanol needs 8-12 liters of water for irrigation and processing, leading to aquifer stress in dry regions. Effluent from distilleries can pollute rivers if not treated, releasing high-BOD wastewater that harms aquatic life. Farming impacts include pesticide runoff, soil degradation, and GHG emissions from fertilizers and machinery. However, closed-loop systems and waste-to-ethanol tech are mitigating these, with net benefits when scaled sustainably.

Controversies & Government Future Plans

Beyond technical issues, controversies include political allegations against Gadkari, whose sons’ firms (like Cian Agro) saw revenues soar from Rs 17 crore to Rs 523 crore amid policy acceleration. The Supreme Court dismissed a PIL on August 31, 2025, upholding E20.

Future plans include expanding to E30 by 2030, boosting capacity to 2,000 crore litres, and diversifying feedstocks under schemes like PM JI-VAN. The government aims to integrate E20 with BS-VI emission standards for better long-term engine performance and environmental compliance, while exploring global partnerships through the Biofuels Alliance to share sustainable production techniques.

Solutions

Addressing E20’s challenges requires a multi-faceted approach that balances national goals with consumer needs. Here’s a detailed look at practical solutions, explained in easy terms with steps vehicle owners can take.

Retrofits and upgrades for compatibility: For older vehicles, the most direct solution is retrofitting key components to make them E20-ready. This involves replacing vulnerable parts like rubber hoses, gaskets, seals, fuel pumps, and injectors with ethanol-resistant materials made from specialized polymers or metals. Costs can range from Rs 5,000 to Rs 20,000 depending on the vehicle model, but it can prevent long-term damage and restore performance.

Automakers like Maruti Suzuki and Honda have started offering certified retrofit kits, and workshops certified by the Society of Indian Automobile Manufacturers (SIAM) can perform these upgrades. Owners should check their vehicle’s VIN (Vehicle Identification Number) on the manufacturer’s website to see if a retrofit is recommended, then schedule it at an authorized service center to maintain warranty validity.

Government incentives and support programs: To make transitions easier, the government could introduce subsidies or tax rebates for retrofits, similar to those for electric vehicle conversions. NITI Aayog’s 2021 roadmap suggested incentives for owners of vehicles older than 10 years, including GST reductions on compatible parts. As of September 2025, some states like Maharashtra and Uttar Pradesh have piloted voucher programs for low-income owners, covering up to 50% of retrofit costs. Additionally, insurance companies are beginning to offer add-on policies that cover E20-related damages, provided the vehicle has documented upgrades. Vehicle owners can approach their Regional Transport Office (RTO) or check the Parivahan portal for available schemes.

Better labeling and consumer choice at pumps: One simple fix is mandating clear labeling at fuel stations about ethanol content, so drivers know exactly what they’re pumping. Currently, many pumps don’t display this prominently, leading to unintentional use in incompatible vehicles. The government could require oil marketing companies like Indian Oil and Bharat Petroleum to offer limited E0 (ethanol-free) or E10 options at select urban stations for classic cars or sensitive engines, similar to aviation fuel availability. This wouldn’t undermine national blending targets but would give owners of pre-2023 vehicles more flexibility.

Education and awareness campaigns: Many problems stem from lack of knowledge, so widespread education is key. The Ministry of Petroleum and Natural Gas could launch apps or SMS alerts explaining E20’s effects, maintenance tips, and compatibility checks. For example, workshops could offer free “E20 health checks” to inspect fuel systems and recommend preventive measures. Schools and community programs in rural areas, where two-wheelers dominate, could teach basic engine care to avoid common issues like phase separation (when water mixes with ethanol and separates from petrol).

Maintenance best practices: Even without retrofits, regular upkeep can minimize risks. Owners should:

• Use fuel additives designed for ethanol blends to stabilize the mixture and reduce corrosion (available at auto stores for Rs 200-500 per bottle).

• Shorten service intervals change fuel filters every 10,000 km instead of 15,000, and inspect rubber components quarterly.

• Keep tanks full to limit air exposure, which causes moisture buildup, and avoid storing vehicles with E20 for long periods without stabilizers.

• Monitor mileage apps to track drops early and adjust driving habits, like maintaining steady speeds to offset efficiency losses.

Industry and policy-level solutions: Automakers need to accelerate flexible-fuel vehicle (FFV) production, which can handle up to E85 blends without issues. The government could mandate E20 compliance for all new vehicles by 2026 and provide R&D grants for second-generation ethanol tech to reduce environmental drawbacks. International examples, like Brazil’s mandate for ethanol-compatible parts since the 1970s, show that with proper infrastructure, such policies can succeed without widespread engine failures.

Long-term systemic fixes: To ensure fairness, an independent oversight body could monitor E20’s real-world impacts, collecting data from service centers and issuing annual reports. This would help refine the policy, perhaps by phasing in higher blends gradually while subsidizing EV transitions for high-mileage users. For environmental viability, prioritizing non-food feedstocks like agricultural waste could cut water usage by 50-70% compared to sugarcane-based production.

These solutions, if implemented thoughtfully, can make E20 workable for everyone—from daily commuters to farmers benefiting from the policy. The key is collaboration between government, industry, and consumers to turn potential problems into manageable adjustments.

                                                     India’s E20 journey represents a bold step toward energy independence and cleaner air, but it’s not without growing pains. From my friend’s mileage woes to nationwide debates on engine health and political ethics, the policy highlights the trade-offs in rapid transitions. With accurate implementation of solutions like retrofits and education, E20 could deliver on its promises without leaving vehicle owners behind. As the government eyes E30 and beyond, the focus must remain on sustainability, transparency, and inclusivity to build lasting public trust.