| Relevance for UPSC Prelims-Basics of biofuels, ethanol production, blending targets,National Bio-Energy Mission, Ethanol Blended Petrol (EBP) Programme,Feedstocks: sugarcane, maize, damaged food grains. Mains-GS-I: Agricultural geography; water stress in Maharashtra & UP,GS-III: Energy security, biofuels, EV transition, climate change mitigation. |
Why in News?
In 2025, India achieved its target of 20% ethanol blending (E20) in petrol, five years ahead of the schedule set under the National Policy on Biofuels, 2018. This development has been hailed as a milestone in India’s energy transition — reducing oil imports, providing assured income to farmers, and contributing to climate commitments.
However, concerns have emerged regarding its impact on consumers, agriculture, environment, and India’s long-term mobility strategy. Vehicle owners are reporting efficiency and maintenance issues, environmentalists are questioning sugarcane dependence, and trade tensions with the U.S. are rising.
Background; About National Policy on Biofuels, 2018
The National Policy on Biofuels, 2018, launched by the Ministry of Petroleum and Natural Gas, replaced the earlier 2009 policy of the Ministry of New & Renewable Energy. Its aim is to promote the use of cleaner fuels, reduce import dependence, and encourage renewable energy.
Categorisation of Biofuels:
- Basic Biofuels (1G): Bioethanol, Biodiesel.
- Advanced Biofuels:
- 2G: Ethanol from crop residues, municipal solid waste (MSW) to fuels.
- 3G: Bio-CNG, algal fuels, and other future technologies.
The policy expands the range of raw materials for ethanol production. Apart from sugarcane juice, it allows use of sugar beet, sweet sorghum, corn, cassava, and damaged food grains such as wheat, broken rice, and rotten potatoes that are unfit for human consumption. Additionally, surplus food grains may also be diverted for ethanol with the approval of the National Biofuel Coordination Committee.
Key Incentives for Advanced Biofuels:
- Viability gap funding of ₹5,000 crore for 2G refineries over six years.
- Tax incentives and a higher purchase price compared to 1G biofuels.
Ethanol (ethyl alcohol) is a biofuel produced from plant-based feedstocks such as sugarcane (molasses, juice, syrup), surplus rice, maize, and crop residues.
- India launched the Ethanol Blending Programme (EBP) in 2003. Significant progress was made after 2014, when blending rose from 1.5% (2014) to 20% (2025).
- The goals of ethanol blending are:
- Energy Security: Reduce crude oil import dependence (India imports ~85% of crude oil).
- Farmer Welfare: Provide alternative demand for sugarcane and food grains.
- Environment: Reduce greenhouse gas (GHG) emissions and urban air pollution.
Government data suggests ethanol blending has saved ₹1.4 lakh crore in foreign exchange since 2014-15 and reduced 700 lakh tonnes of CO₂ emissions.
Vehicle Owners’ Reactions: Efficiency vs Costs
Despite official claims, vehicle owners remain skeptical:
- A LocalCircles survey (2025) covering 36,000 people across 315 districts found 66% oppose the E20 mandate, citing:
- Mileage drop due to ethanol’s lower calorific value (about 33% less than petrol).
- Maintenance issues: Ethanol is hygroscopic (absorbs water), causing corrosion of fuel tanks, rubber pipes, injectors, and higher service costs.
- Compatibility concerns: Vehicles manufactured before 2020 (mostly carbureted engines) cannot adapt to E20 fuel.
For example, Hero MotoCorp explicitly advises replacement of fuel system rubbers and plastics for E20 compatibility.
While the government insists losses are “marginal” and manageable via engine recalibration, NITI Aayog has suggested tax rebates to compensate consumers.
Agricultural Dimensions: Sugarcane Dependence and Food Security Risks
Ethanol expansion has transformed India’s sugarcane economy:
- Supply from sugarcane-based ethanol rose from 40 crore litres (FY14) to 670 crore litres (FY24), using about 9% of sugar output.
- Government has paid ₹1.20 lakh crore to farmers since FY15 under assured procurement.
Issues:
- Water Stress:
○ Sugarcane requires 60-70 tonnes of water per tonne of cane.
○ Regions like Maharashtra’s Marathwada and Vidarbha, already drought-prone, extract excessive groundwater.
○ Desertification and Land Degradation Atlas (2021): ~30% of India’s land is degraded; sugarcane monocropping is a contributor. - Food Security Trade-offs:
○ In 2024-25, 34% of maize output was diverted for ethanol → India imported 9.7 lakh tonnes of corn, a six-fold increase.
○ 5.2 million tonnes of rice was allocated by FCI for ethanol (3.6% of total production), raising questions amid nutritional insecurity.
Thus, while sugarcane assures farmers stable income (via Fair and Remunerative Price – FRP), over-dependence poses risks to food security, land, and water sustainability.
Environmental Implications: Mixed Record
Ethanol blending is positioned as an eco-friendly solution, but the picture is nuanced.
- Positives:
- Cleaner combustion → reduction in NOx, PM, CO emissions.
- Contribution to 700 lakh tonnes CO₂ reduction since 2014.
- Negatives:
- Groundwater depletion due to water-intensive sugarcane.
- Monocropping and land degradation accelerate soil infertility.
- Corrosion of vehicle components may increase resource consumption.
- Diversion of grains may exacerbate malnutrition and food inflation.
Thus, ethanol blending cannot be seen as a standalone environmental solution; it must be coupled with second-generation ethanol (from crop residues, cellulosic waste) for genuine sustainability.
International Dimension: U.S. Pressure
India’s ethanol policy has attracted the attention of the United States, the world’s largest ethanol exporter.
- The 2025 U.S. National Trade Estimate Report flagged India’s restrictions on ethanol imports as a “trade barrier”.
- The Trump administration has pushed India to open its ethanol market.
- Indian Sugar Mills Association (ISMA) opposes this, arguing it would undermine domestic investment and hurt farmers.
This issue could become a bilateral trade dispute, impacting broader India-U.S. economic relations.
Comparison with Brazil
Brazil’s ethanol success story is often cited, but the contexts differ:
- Brazil’s Proálcool Programme (1975) built ethanol capacity gradually with subsidies, research, and flex-fuel vehicles.
- Brazil uses E27 petrol widely, with engines adaptable to different ethanol fractions.
- India’s shift from E10 to E20 has been much faster, leaving older vehicles incompatible and consumers dissatisfied.
Thus, Brazil highlights the importance of phased implementation and flex-fuel technology, rather than sudden mandates.
Impact on EV Adoption: Complement or Distraction?
Ethanol blending has raised questions about India’s Electric Vehicle (EV) transition.
- EV adoption in India was 7.6% of vehicle sales in 2024, far behind China, U.S., and EU.
- Government target: 30% by 2030, requiring aggressive scale-up.
Challenges:
- Rare Earth Element (REE) dependency: India imports critical REEs (like germanium, neodymium) mainly from China.
- Supply disruptions led Maruti Suzuki to cut production targets for its new EV (e-Vitara).
- Without secure REE supplies and renewable electricity, EV rollout remains constrained.
Hence, ethanol blending is a short-term bridge fuel, but India must not lose focus on EV ecosystem development for long-term decarbonisation.
Way Forward
- Consumer-Centric Policies: Allow choice between E10/E20 fuels; provide tax rebates for efficiency losses; promote retrofitting.
- Sustainable Feedstock: Shift from sugarcane to second-generation ethanol (crop residues, non-food biomass).
- Water-Energy Nexus: Promote water-efficient crops; integrate ethanol policy with groundwater sustainability.
- Balanced Trade Strategy: Protect domestic ethanol producers while engaging diplomatically with U.S. trade pressures.
- EV and Ethanol Synergy: Use ethanol as a transition strategy but accelerate EV adoption with rare-earth diplomacy and domestic supply chains.
- Phased Approach: Emulate Brazil’s gradual, research-backed rollout rather than rushing mandates.
Conclusion
Ethanol blending marks a significant milestone in India’s energy security journey. It reduces oil imports, boosts farmer incomes, and contributes to emission cuts. Yet, its sustainability is contested — given water-guzzling sugarcane, consumer dissatisfaction, food security trade-offs, and its possible distraction from EV adoption.
India’s ethanol policy must therefore evolve towards a balanced, phased, and sustainable model — one that leverages second-generation biofuels, flex-fuel technology, and a strong EV ecosystem to achieve true decarbonisation.
UPSC Prelims PYQ-
Q. According to India’s National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels? (2020)
- Cassava
- Damaged wheat grains
- Groundnut seeds
- Horse gram
- Rotten potatoes
- Sugar beet
Select the correct answer using the code given below:
(A) 1, 2, 5 and 6 only
(B) 1, 3, 4 and 6 only
(C) 2, 3, 4 and 5 only
(D) 1, 2, 3, 4, 5 and 6
| Answer: (A) 1, 2, 5 and 6 only Explanation: The National Policy on Biofuels, 2018 permits ethanol production from — Sugar-rich crops → Sugarcane juice, Sugar beet, sweet sorghum. Starch-rich crops → Cassava, corn, etc. Damaged food grains (unfit for human consumption) → Damaged wheat grains, Rotten potatoes, broken rice, etc. Not included → Groundnut seeds, Horse gram. Hence, the correct set is Cassava, Damaged wheat grains, Rotten potatoes, and Sugar beet = 1, 2, 5 and 6 only. |
Upsc Mains practice question-
Q. “The ethanol blending programme in India is not merely an energy initiative but a multi-dimensional strategy for economic, environmental, and strategic gains.” Discuss the opportunities and challenges of ethanol adoption in India. (Answer in 250 words)
SOURCE- THE HINDU
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