Impact of Ethanol Blending

General Studies Paper-3

Context: India achieved 20% ethanol blending in petrol (E20) in 2025, five years earlier than the 2030 target set under the National Policy on Biofuels (2018).

• The government highlights significant benefits including reduced oil imports, enhanced farmer incomes, and lower carbon dioxide emissions. However, concerns remain over consumer dissatisfaction regarding mileage drop, agricultural sustainability issues etc.

About EBP

• Launched: Pilot in 2003; expanded under the National Policy on Biofuels (2018).
• Target: Achieve 20% ethanol blending (E20) by 2030, achieved in 2025.
• Ministry: Ministry of Petroleum and Natural Gas
• Objectives:
  • Reduce India’s heavy reliance (~85%) on crude oil imports.
  • Provide assured markets and improve farmer incomes.
  • Lower greenhouse gas emissions by substituting fossil fuels.
  • Feedstock: Sugarcane (molasses and juice), rice, maize/corn, damaged food grains.

Key Concerns

• Consumer Issues:
  • Drop in Mileage: LocalCircles survey found 67% of petrol vehicle owners opposed E20, citing lower fuel efficiency and increased maintenance costs.
  • Limited Price Benefit: Despite a 65% fall in global crude oil prices since 2022-23, petrol prices have been cut by only about 2%, raising doubts about cost savings passed to consumers.
• Agricultural Sustainability:
  • Water-Intensive Crop: Sugarcane consumes 60–70 tonnes of water per tonne, contributing to groundwater depletion, particularly in Maharashtra and Uttar Pradesh.
  • Land Degradation: Nearly 30% of India’s land area is degraded, partly due to unsustainable agricultural practices.
  • Food vs Fuel Dilemma: Diverting rice and corn for ethanol (34% of corn output used for ethanol in 2024–25, along with record rice allocation) has led to increased corn imports, affecting food security.

Way Forward

• Diversify Feedstock: Shift away from sugarcane to alternative sources such as maize, bamboo, and agricultural residues to reduce environmental impact.
• Consumer Protection: Implement tax incentives or compensation as recommended by NITI Aayog to address concerns over fuel efficiency drop.
• Balanced Energy Strategy: Use ethanol as a transitional or bridge fuel while aggressively scaling up EV adoption backed by renewable energy-supported charging infrastructure.