India Times | What Is Ethanol Blending And How Will It Help India Save Billions Of Dollars?

Feb 13,2023

A program to promote the use of biofuels and reduce emissions and dependence on imports is introduced with gasoline containing 20% ethanol being sold at select petrol stations in 11 states and territories.

The government intends to double the amount of ethanol that is mixed into gasoline by 2025 to 10% (10% ethanol, 90% gasoline).

At the India Energy Week (IEW) 2023 in Delhi, Prime Minister Narendra Modi unveiled the higher 20 per cent ethanol-mixed gasoline two months ahead of its planned April release. 

Modi stated, "We have increased ethanol blending in petrol from 1.5% in 2014 to 10% and are now moving toward 20% blending."

The E10 goal, which stipulates that 10% of the nation's gasoline now contains ethanol, has previously been declared accomplished by the government.

India achieved 10% ethanol blending in 2022
In the first phase, 15 cities will be covered by the Ethanol Blended Petrol Program, which will be expanded throughout the country in the next two years. The program, which has already saved India up to Rs 53,894 crore in foreign exchange and benefits farmers, will offer E-20 (petrol with 20% ethanol) at 84 petrol pumps in 11 states and territories. 

Oil Minister Hardeep Singh Puri announced that India achieved 10% ethanol blending in June 2022, 5 months ahead of schedule, and E-20 blended petrol will now be rolled out ahead of schedule on a pilot basis.

He further said, “We also advanced the availability of E20 ((petrol with 20 per cent ethanol) blended petrol to 2025, 5 years from earlier planned in 2030…As a country on a fast trajectory of economic growth, India is projected to witness the largest increase in energy demand of any country over the next two decades, accounting for close to 28 per cent of incremental global growth in energy demand.”

What is Ethanol Blending?
In ethanol blending, a blended motor fuel containing ethyl alcohol derived from agricultural products is blended with petrol.

Ethanol is a biofuel, naturally produced by the fermentation of sugars by yeasts or by petrochemical processes like ethylene hydration. Ethanol is high in oxygen content, allowing an engine to more thoroughly combust fuel.

It is used for other purposes as well such as antiseptic, disinfectant, and chemical and solvent synthesis of organic compounds.

The Ethanol Blended Petrol Programme, launched in 2003, aims to increase the use of renewable and environmentally friendly fuels and reduce India's dependence on imported fuel.

It is in line with the National Policy on Biofuels and has set a government target of 10% ethanol blending by 2022 and 20% blending by 2030. The procurement price of ethanol is fixed by the government, and oil companies can purchase it from domestic sources. 

The program allows the use of food grains like maize, bajra, and fruit and vegetable waste in addition to sugarcane for ethanol production, providing additional income for farmers.

How will it help India?
India, the world's third-largest oil consumer and importer, is looking to reduce its dependence on oil imports by using ethanol extracted from sugarcane, broken rice, and other agricultural products. 

The use of E20 (a blend of 20% ethanol and 80% gasoline) leads to a reduction in carbon monoxide emissions by 50% in two-wheelers and 30% in four-wheelers, compared to pure gasoline. 

Hydrocarbon emissions are also estimated to decrease by 20% in both two-wheelers and passenger cars. India spent USD 120.7 billion on oil imports in 2021-2022 fiscal and USD 125 billion in the first nine months of the current fiscal.

A paper by the NITI Aayog shows that in 2019, over 110 billion litres of ethanol fuel was produced globally, with the US and Brazil accounting for 84% of production. 

India imports over 85% of its oil, and ethanol blending could reduce this dependency and save billions of dollars, as the country's net petroleum import in 2020-21 was 185 million tonnes at a cost of USD 551 billion. 

Ethanol is a less polluting, efficient, and renewable fuel that is derived from plants and is a lower-cost alternative to petrol. Mixing 20% ethanol with petrol could reduce India's yearly auto fuel import bill by Rs 30,000 crore.