India’s Ethanol Blended Petrol (EBP) Programme has emerged as one of the most impacful national interventions of the past decade. Far beyond being a fuel-mixing initiative, the ethanol movement today delivers tangible gains in energy security, rural incomes, foreign exchange savings, and environmental sustainability. However, despite these outcomes, lingering misconceptions and intermittent policy uncertainty risk diluting its long-term strategic value.
Background and Progress
The EBP Programme is implemented under notified Government policies and BIS fuel standards. All retail outlets across the country now dispense ethanol-blended petrol. In ESY 2024–25, India has achieved an average ethanol blending level of nearly 20%, placing the country well ahead of schedule in reaching the E20 target. International experience from mature markets such as Brazil and the United States further validates ethanol blending as a safe, efficient, and proven fuel practice.
Key Outcomes and National Benefits
Feedstock Security and Sustainability
India’s ethanol ecosystem is built on diversified and surplus feedstocks, including B-heavy molasses, surplus sugar, damaged or unfit grains, excess FCI rice, and industrial maize. Notably, grain-based ethanol now accounts for over 70% of total ethanol supply, reducing dependence on sugarcane and effectively addressing concerns related to “food versus fuel.” This diversified approach ensures regional balance and long-term sustainability.
Energy Security and Foreign Exchange Savings
Ethanol blending directly substitutes imported petrol, insulating India from global crude oil
price volatility. During ESY 2024–25 alone, ethanol blending is estimated to have saved
approximately ₹40,000 crore in foreign exchange, strengthening India’s balance of payments and enhancing strategic energy autonomy.
Farmer Welfare and Rural Industrialisation
The ethanol programme has channelled over ₹50,000 crore directly to farmers through
procurement of feedstocks. In parallel, large-scale investments in rural distilleries have
generated employment, strengthened local economies, and promoted agro- industrialisation. Ethanol has thus become a stable demand anchor for agricultural surplus, reinforcing income security for farmers.
Environmental and Consumer Impact
Ethanol blending reduces carbon emissions and particulate pollution, supporting India’s clean air goals and long-term net-zero commitments. Importantly, ethanol blending has not resulted in any direct increase in petrol prices for consumers. Any marginal varia on in vehicle mileage is offset by macro-economic stability, environmental gains, and long-term price resilience.
Strategic Assessment
The EBP Programme simultaneously advances multiple national objectives—farmers’ income stability, rural development, energy self-reliance, climate action, and foreign exchange conservation. Such convergence of outcomes is rare among large-scale policy initiatives. Ethanol production capacity must therefore be viewed not as “overcapacity,” but as strategic national infrastructure, akin to power genera on, fuel storage, or transport networks, enhancing long-term resilience and future-proofing India’s energy transition.
Policy Direction Sought
To sustain momentum, the following policy directions merit consideration:
1. Affirm long-term policy stability for ethanol blending beyond E20, including promo on of
flex-fuel vehicles (FFVs) at concessional taxa on.
2. Develop dedicated infrastructure for ethanol dispensing with appropriate fiscal incentives.
3. Provide predictable and transparent offtake visibility to producers.
4. Recognise the ethanol ecosystem as a national asset under the Atmanirbhar Bharat and
Viksit Bharat frameworks.
5. Encourage continued diversification of feedstocks to ensure sustainability and regional
equity.
The author is President of Grain Ethanol Manufacturers Association (GEMA).
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