The Centre on Friday defended its ethanol-blended petrol (EBP) programme amid concerns over engine performance and reduced fuel efficiency in vehicles using ethanol blends, asserting that the initiative has strengthened the agricultural economy, reduced dependence on imported crude oil and saved the country more than Rs 1.90 lakh crore in foreign exchange since 2014-15, reported PTI.
According to the report, Ashwani Srivastava, Joint Secretary in the Ministry of Consumer Affairs, Food and Public Distribution, who was speaking at a conclave organised by the Grain Ethanol Manufacturers Association (GEMA), said the ethanol blending programme has evolved into a key pillar of India's farm economy by creating a market for surplus crops while improving energy security.
According to Srivastava, ethanol supplied under the programme has replaced more than 310 lakh metric tonnes of crude oil between 2014-15 and 2026, resulting in foreign exchange savings of over Rs 1.90 lakh crore. The programme has also helped cut net carbon dioxide emissions by nearly 930 lakh metric tonnes, he added.
The official said the scheme, which initially relied on sugarcane-based ethanol, has transformed the financial health of the sugar sector. Timely diversion of surplus sugar towards ethanol production has reduced the industry's dependence on government support and ensured faster payments to sugarcane farmers.
Between 2014-15 and 2020-21, the Centre provided nearly Rs 14,600 crore in subsidies to sugar mills, including export incentives to clear excess sugar stocks. However, no export subsidies have been required since 2021-22 as surplus sugar is now increasingly being used for ethanol production, Srivastava said, adding that pending dues to sugarcane farmers are now at their lowest level.
He also highlighted a shift in the raw materials used for ethanol production, with maize overtaking sugarcane as the largest feedstock. Maize accounted for 47 per cent of ethanol supplied to oil marketing companies during the 2024-25 supply year and 36 per cent so far in the current supply year, a development the government says has improved returns for maize growers.
India's ethanol production capacity has expanded sharply over the past decade—from about 21 crore litres in 2013-14 to nearly 2,000 crore litres at present, Srivastava said.
Referring to the recent Cabinet decision to tighten quality norms under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), he said reducing the permissible broken-grain content in rice supplied through the public distribution system from 25 per cent to 10 per cent would generate additional broken rice during milling. The surplus broken rice would be made available in the open market for industrial purposes, including ethanol production, while ensuring better-quality rice for more than 50 crore beneficiaries under the scheme.
Srivastava also said the government's push for flex-fuel vehicles capable of running on ethanol blends ranging from E20 to E100, along with the planned introduction of E85 fuel, would provide consumers with greater flexibility and support the next phase of the ethanol blending programme.
Echoing the government's position, GEMA president C K Jain said the ethanol programme was introduced only after years of scientific evaluation and testing.
He said extensive research on E20 fuel was conducted between 2014 and 2018, during which vehicles were driven for 2 lakh kilometres on conventional petrol and another 2 lakh kilometres on E20 fuel.
"The result showed that E20 is safe for all engines. Then it was executed and implemented after technical studies, pilot projects, policy discussions, and not in haste," Jain said.
Urging a fact-based debate on ethanol blending, he said public discussions should be guided by evidence rather than misconceptions.
"There should always be healthy discussions, but the discussions should be on facts, not myths," he said.
Jain added that the industry's biggest hurdle today is not production capacity but public perception. He noted that India has invested around USD 14 billion in ethanol production, compared with USD 5-6 billion spent by the United States on sugarcane cultivation, and called for a clear policy roadmap beyond the current 20 per cent blending target to encourage further investment and improve farm productivity.