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Informist, Thursday, Dec. 4, 2025

 

NEW DELHI – With ethanol blending in petrol currently capped at 20%, India's biofuel industry has surplus capacities of over 4.5 billion litres of ethanol. The fastest way to absorb this surplus is by rolling out flexi-fuel vehicles that are designed to run on higher ethanol blends such as E85 or higher, industry officials said. 

 

"We have achieved E20. Now, the lowest-hanging fruit is flexi-fuel and strong hybrid. The technology is ready. The OEMs (original equipment manufacturers) are ready with the technology," said Deepak Ballani, director general, the Indian Sugar & Bio-energy Manufacturers Association. 

 

"Only the policy regulations have to be put in place so that the vehicles can come on the road, and the organic consumption of ethanol will increase," Ballani told reporters at a media interaction at Triveni Engineering & Industries' Sabitgarh facility in Uttar Pradesh. Flexi-fuel vehicles are petrol-based engines that can run on regular petrol as well as higher ethanol blends such as E85 or E100.

 

The biofuel industry has been pushing for favourable policies for flexi-fuel vehicles after the rollout of E20 triggered public outcry over fuel efficiency and vehicle compatibility, and the diversion of food crops for fuel production. There is also a growing consumer criticism against the compulsory use of blended petrol.

 

Using E20 results in a marginal reduction in fuel efficiency for vehicles designed for E10 and recalibrated for E20. However, automakers say efficiency losses can be reduced with engine modifications. Amid criticism over E20, the government has gone silent on its earlier plan to gradually scale up to E25, E27, and eventually E30. Currently, India is dispensing 20% ethanol-blended petrol to retail consumers, having achieved 20% blending in October and 19.2% blending on a cumulative basis in 2024-25 (Nov-Oct). 

 

India has been implementing the ethanol blending programme to reduce crude oil imports, promote green mobility, and boost the rural economy.

 

EXCESS CAPACITY

India currently has an ethanol production capacity of over 19 billion litres, while oil marketing companies only require about 12 billion litre of ethanol in 2025-26 to sustain the 20% ethanol blending in petrol uniformly across the country. 

 

Oil companies have contracted only about 10.5 billion litres of ethanol so far. India needs about 3.3 billion litres of ethanol for potable liquor and other industrial uses, leaving a surplus of 4.5-5.0 billion litres, Ballani said. 

 

"We are stuck at 20% (ethanol blending in petrol), we need to work on enhancing the consumption," Ballani said. By commercially launching flexi-fuel vehicles, about 3.5 billion litres of additional ethanol consumption is possible by 2030, Ballani said. The industry has also requested the government to allow exports of first-generation ethanol to neighbouring countries as exports are viable "because of the proximity and the reduced logistic and weight cost", he added. 

 

Ballani noted that the industry has invested INR 400 billion to create ethanol capacity with the "backing of government" through interest-subvention schemes, and urged the government to roll out policies that support consumer adoption of flexi-fuel vehicles. 

 

To increase adoption, industry officials urged the government to reduce GST on flexi-fuel vehicles from 28% to 5% in line with electric vehicles. "You may bring in any technology. Ultimately, it is the customer who decides to buy. And customer decision is usually around economics," Toyota Kirloskar Motor's Country head & executive Vice President Vikram Gulati said. 

 

Citing Brazil's successful adoption of flexi-fuel, Gulati also stressed for differential fuel pricing for higher ethanol blends. "By law in Brazil, the differential between E100 pricing and E30 has to be 33%. So the natural choice the consumer is making is buying E100, not buying E27 or E30," he said. End

 

Reported by Afra Abubacker

Edited by Akul Nishant Akhoury

 

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