Government Releases India’s Ethanol Blending Roadmap

Mobility Outlook Bureau
21 Jun 2021
10:00 AM
5 Min Read

The MoP&NG should lay out the target for E10 blending all over the country by April 2022, and phased roll-out of E20 blending from April 2023, recommended a committee.


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An expert committee set up by NITI Aayog and the Ministry of Petroleum and Natural Gas has recently released its report on India’s ethanol blending roadmap. The report includes an annual roadmap for production, and supply of ethanol till 2025-26, and systems for its countrywide marketing. 

Most of the petroleum that India imports is used in transportation. In FY21 alone, India’s net import of petroleum was 185 MT at a cost of $ 551 billion. A successful E20 programme (blending of 20% ethanol in petrol) can save the country $4 billion or INR 30,000 crore per annum. Ethanol is also a less polluting fuel, and offers equivalent efficiency at lower cost than petrol. 

“Availability of large arable land, rising production of foodgrains and sugarcane leading to surpluses, availability of technology to produce ethanol from plant based sources, and feasibility of making vehicles compliant to ethanol blended petrol make E20 not only a national imperative, but also an important strategic requirement,” said Dr Rakesh Sarwal, Additional Secretary, NITI Aayog and the Chairman of the committee in his foreword.

Through its various departments, the government has put in place a favourable regulatory and retail ecosystem for safe and effective use of ethanol blended petrol. The government’s recent approval of interest subvention incentives for grain based distilleries makes the target of 20% blending of petrol in the country by 2025 feasible and within reach. 

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Oil Marketing Companies have prepared their plans for phased rollout, and vehicle manufacturers have assured of making a similar plan once the intention of the government with timelines is publicly declared. 

Dr Sarwal further said that smoothing of some regulatory stipulations to provide single window service for setting of new ethanol distilleries is needed, along with easing of interstate movement of denatured ethanol.

The committee was chaired by Dr Rakesh Sarwal, Additional Secretary, NITI Aayog, while Sunil Kumar, Joint Secretary (R), Ministry of Petroleum & Natural Gas, was the Member Secretary. Other members of the committee included Amit Mehta, Joint Secretary, Department of Heavy Industries; Amit Varadan, Joint Secretary, Ministry of Road Transport & Highways; Subodh Kumar Singh, Joint Secretary (Sugar), Department of Food & Public Distribution; Dr SSV Ramakumar, Director (R&D), Indian Oil Corporation Limited and Dr Reji Mathai, Director, Automotive Research Association of India (ARAI).

Excerpted summary of the proposed roadmap 

Achieving energy security and transitioning to a thriving low carbon economy is critical for a growing nation like India. Blending locally produced ethanol with petrol will help India strengthen its energy security, enable local enterprises and farmers to participate in the energy economy and reduce vehicular emissions. 

The Government of India had notified the National Policy on Biofuels – 2018 (NPB-2018) on june 4, 2018 wherein, under the Ethanol Blended Petrol (EBP) programme, an indicative target of 20% blending of ethanol in petrol by 2030 was laid out. 

Cabinet Secretary, Government of India, while chairing a meeting of the Committee of Secretaries (CoS) dated November 28, 2020, on the subject ‘Manufacturing, Sales, Utilisation and Blending of Ethanol’, inter-alia directed that, “MoP&NG may institute an Expert Group to finalise a clear roadmap not only to achieve year-wise blending targets for the next 10 years but also the various policy implications of such a plan. Issues such as pricing of ethanol, matching pace of the automobile industry to manufacture vehicles with new engines with the supply of ethanol, pricing of such vehicles, fuel efficiency of different engines etc. may be studied.”

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Accordingly, an inter-ministerial committee was formed. Subsequently, the target year for achieving 20% ethanol blending in petrol was advanced to 2025 by CCEA in the meeting held on December 21, 2020. The committee noted that a very strong foundation for the ethanol blending programme had been laid out by the following initiatives:

  1. Interest subvention scheme for molasses and grain-based distilleries (DFPD);
  2. Setting of standards for E5 (Ethanol 5%, Petrol 95%), E10 and E20 blends of ethanol blended petrol (Bureau of India Standards, BIS);
  3. MoRTH has notified GSR 156(E) on March 8, 2021 for adoption of E20 fuel as automotive fuel and issued mass emission standards for it. MoRTH has also notified safety standards for ethanol blended fuels vide GSR 343(E) dated May 25, 2021 on the basis of Automotive Industry Standard (AIS 171). It lays down safety requirements for type approval of pure ethanol, flex-fuel & ethanol-gasoline blended vehicles in India.
  4. BS-VI emission norms in effect since April 1, 2020 are applicable for E20 vehicles.

After soliciting inputs of relevant ministries and associations, analysing progressive demand-supply projections, challenges in the manufacture of E20 vehicles and infrastructure of OMCs, the committee suggests a gradual rollout of E20 ethanol in the country to achieve the target by 2025. In the meantime, the rollout plan suggests pan-India availability of E10 from April 2022 for use as a protection fuel to meet the demands of existing vehicles till April 2025.

In this report, the committee has estimated an ethanol demand of 1,016 crore litres based on expected growth in vehicle population. Modelling exercise on expected penetration of electric vehicles estimates the ethanol demand for petrol blending in the range of 722-921 crore litres in 2025. The committee has, however, framed its recommendations on an optimistic demand for ethanol (1,016 crore litres) to ensure that the objectives of E20 are met by 2025.

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The current ethanol production capacity in India of 426 crore litres derived from molasses-based distilleries, and 258 crore litres from grain-based distilleries is proposed to be expanded to 760 crore litres and 740 crore litres respectively. This would be sufficient to produce 1,016 crore litres of ethanol required for EBP and 334 crore litres for other uses. 

This will require 60 lakh MT of sugar and 165 lakh MT of grains per annum in ethanol supply year (ESY) 2025 to be used for producing ethanol, which the country can support. The committees’ generous demand estimates, and consequent supply projections give us confidence that our suggested plan for E20 roll-out is robust.

To get the ball rolling, MoP&NG should proclaim and lay out the target for 10% ethanol blending of gasoline fuel all over the country by April 2022. MoP&NG should further initiate phased roll-out of 20% ethanol blending from April 2023 onwards to enable action by all stakeholders, namely OMCs, vehicle manufacturers, service stations, distilleries, and entrepreneurs. 

This should be supported by a simpler and quicker regulatory regime, preferably single window clearance by the states, Ministry of Environment, Forest & Climate Change, Petroleum & Explosives Safety Organization (PESO), Department of Food and Public Distribution (DFPD) and MoP&NG and the launch of educational campaigns for the consumers.

Getting vehicles ready 

When using E20, there is an estimated loss of 6-7% fuel efficiency for four-wheelers, which are originally designed for E0 and calibrated for E10, 3-4% for two-wheelers designed for E0 and calibrated for E10 and 1-2% for four-wheelers designed for E10 and calibrated for E20. 

SIAM has informed that with modifications in engines (hardware and tuning), the loss in efficiency due to blended fuel can be reduced. To compensate the consumers for a drop in efficiency from ethanol blended fuels, tax incentives on E10 and E20 fuel may be considered.

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SIAM has assured the committee that once the roadmap for availability of ethanol blended fuel in the country is issued by MoP&NG, they would gear up to supply compatible vehicles in line with the roadmap. E20 material compliant and E10 engine tuned vehicles may be rolled out all across the country from April 2023. These vehicles can tolerate 10% to 20% of ethanol blended petrol and also give optimal performance with E10 fuel. 

Vehicles with E20 tuned engines can be rolled out all across the country from April 2025. These vehicles would run on E20 only and will provide high performance.

To accelerate the adoption and transition to ethanol blended fuels, price incentives through tax relief at the retail level on ethanol blended fuel and tax incentives for vehicles compatible with E20 are suggested. The government may also encourage use of lower water consuming foodgrain crops like maize, and 2G feedstock for production of ethanol. 

NB: All images are representational. 

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