More Stories

Informist, Tuesday, Feb. 17, 2026

 

By Pallavi Singhal

 

NEW DELHI – Praj Industries Ltd. is likely to set up a demonstration plant within a year to scale up trials of 10% isobutanol-blended diesel, as part of a continuing study on the fuel's compatibility and blending limits being conducted by the Automotive Research Association of India.

 

In an interaction with Informist, a senior executive at Praj Industries said that after 8–10 months of controlled trials led by the automotive research body, the company is moving to establish a semi-commercial demonstration unit. The facility is expected to be operational within 12–18 months, subject to regulatory approvals and logistical readiness, and will help to generate broader performance data in near-commercial conditions.

 

"So far, the studies for up to 10% blend have shown promise," the executive said. "But these studies were done on a limited number (of vehicles)... once we go to a demonstration unit--a semi-commercial unit--we will have more answers." Semi-commercial trials are intermediate, mid-scale tests bridging pilot research and full-scale commercial production, designed to validate performance, safety, and economic viability in real-world conditions.

 

The plant's location is "under discussion", the senior executive said, with an announcement expected later this year. An official announcement in this regard is likely to "come soon", the executive added.

 

Indian customers currently have access to E20 fuel, which is a blend of 20% ethanol and 80% petrol. Isobutanol is a biofuel derived from ethanol after fermenting it. The Centre had earlier pushed for blending ethanol with diesel.

 

The shift to isobutanol came after ethanol blending with diesel failed to deliver satisfactory outcomes. On Sept. 11, Minister of Road Transport Nitin Gadkari acknowledged the setback. "We tried ethanol with diesel, but the results were not satisfactory," Gadkari said at the India Sugar and Bio-Energy Conference. "Isobutanol is now under trial as an alternative fuel."

 

The problem was ethanol's low flashpoint, which made blending with diesel technically unviable, Reji Mathai, director of the Automotive Research Association of India, had told Informist in an interaction earlier. Isobutanol, by contrast, has higher energy density than ethanol, is less corrosive, and blends in a more stable manner with diesel.

 

The isobutanol push seeks to build on India's rapid success with ethanol in petrol. State-owned oil marketing companies achieved 20% ethanol blending in petrol nearly a year ahead of the government's original October 2026 target.

 

Industry sees isobutanol as the logical next step, particularly in managing surplus ethanol supply. Isobutanol is derived from ethanol through fermentation and upgradation. Its superior physical properties make it better suited than ethanol for blending with diesel. Globally, companies such as Gevo, Inc. have explored alcohol-to-jet and isobutanol pathways, but large-scale blending with diesel remains relatively nascent--positioning India among early movers the country can go ahead with commercialisation.

 

MISSING POLICY

Despite encouraging trial results, executives in the ethanol and automotive industries say policy clarity will determine how quickly the blended fuel can be scaled up. The Praj Industries executive stressed that biofuel transitions would need financial support similar to that which enabled ethanol's rapid rise. "Once the policy was in place, it was a six- to seven-year period for it to reach where it is... with a good policy framework, we see this (isobutenol blend) developing in the same kind of timeframe."

 

Industry is also pushing for incentives for flex-fuel vehicles to ensure adequate demand. "Flex-fuel definitely needs government support...," the Praj Industries executive said. "There needs to be a level playing field as far as taxation is concerned compared to EVs (electric vehicles)." India's electric vehicle incentives under the 'Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India' scheme have accelerated the penetration of electric vehicles. Biofuel producers argue that similar tax parity would expand the fleet capable of consuming higher biofuel blends.

 

According to the executive, the government is keeping close tabs on the progress of the diesel-blending study. If all goes well, India could formally consider introducing a structured isobutanol-blending mandate for diesel on the lines of petrol, the executive said. If current timelines hold, the financial year 2027–28 (Apr-Mar) could mark the beginning of the journey towards India's next biofuel milestone.

 

Praj Industries recently demonstrated its ethanol-to-jet process at its fully integrated Sustainable Aviation Fuel demonstraton plant. Tuesday, shares of Praj Industries ended 10% higher at INR 333.10 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.