Ethanol, Sovereignty, and the Scent of Change

India’s pursuit of E20, the blending of 20 percent ethanol into petrol, is no longer theoretical. The transition is already taking place at fuel stations across multiple states, embedded into the design architecture of vehicles rolling off assembly lines since April 2023. The goals: to reduce dependence on imported crude oil, to lower the carbon intensity of internal combustion engines, and to redirect agricultural value toward sugarcane and maize farmers. The blend is not just chemical; it is structural, economic and political.

The shift has been swift. From an experimental 5 percent blend introduced in 2003, India reached E10 by 2022 and, by early 2025, initiated E20 ahead of its original 2030 target, according to the Ministry of Petroleum and Natural Gas. Ethanol-blended fuel is now present at over 12,000 petrol stations. New vehicles are required to be E20 material-compliant, but older ones remain in ambiguous territory.

Testing agencies like the Automotive Research Association of India, the Indian Oil Corporation, and the Indian Institute of Petroleum have all conducted controlled trials. Their findings suggest no significant engine damage even after 100,000 kilometres of testing, and only a modest drop in mileage — between 1 to 2 percent in vehicles built for E10, and between 3 to 6 percent for older models. Drawing on these results, the Petroleum Ministry has said that consumer concerns are “largely misplaced”.

Owners of pre-2010 vehicles, however, describe a slow erosion of performance and a slight hesitation on ignition. Mechanics have warned of ageing gaskets and hoses showing signs of premature wear. Some note a faint scent of alcohol during cold starts, ethanol’s volatility making itself known. Though not catastrophic, these are inevitable consequences of a fuel evolution that has outpaced the legacy fleet.

Ethanol, by nature, is hygroscopic. It absorbs water from the atmosphere, and this moisture can corrode or degrade rubber and polymer-based fuel system components if they were not built for alcohol compatibility. In older engines with carburettors rather than fuel injectors, or with natural rubber seals and hoses, this can manifest as swelling, cracking, or accelerated deterioration. The government acknowledges that parts in such vehicles may need replacing after 20,000 to 30,000 kilometres, though it maintains that such repairs are inexpensive.

The roadmap that led to this point, titled Roadmap for Ethanol Blending in India 2020–2025, was released in June 2021. It outlined an ambitious path: consolidate sugarcane-based ethanol production, diversify feedstocks toward maize and surplus foodgrain, scale up ethanol distillation capacity, and establish an ecosystem of vehicles and infrastructure compatible with higher blends. India’s macroeconomic arguments for blending are clear. According to government figures, the country saved Rs 1.36 lakh crore in foreign exchange outflows through ethanol blending and transferred nearly Rs 1.18 lakh crore to farmers for ethanol procurement. The emissions case is equally robust. According to NITI Aayog and the Indian Institute of Science, sugarcane-based ethanol reduces lifecycle greenhouse gas emissions by around 65 percent compared to petrol, and maize-based ethanol by roughly 50 percent.

Many issues need to be ironed out yet, however. In contrast to the United States, where the Environmental Protection Agency allows E15 for vehicles manufactured after 2001 but mandates clear pump labelling, India has no legal requirement that fuel dispensers indicate blend levels. There is no mandate that station attendants inform motorists whether the fuel is E10 or E20. As a result, many drivers fill their tanks unaware of the blend they are using, or whether their vehicle is compatible. In Brazil, by comparison, ethanol blends of 20 to 27 percent have been standard since the 1990s, and nearly all cars sold today are flex-fuel vehicles capable of running on anything from E20 to much higher concentrations. Brazil’s infrastructure evolved in parallel with its policy. India’s transition, in comparison, is more abrupt. Europe too has taken a gradual approach, advancing from E5 to E10 in step with emission norms and manufacturer readiness. India’s fleet, however, is uneven.

As ethanol production expands, so too has its base of raw materials. Initially derived largely from sugarcane molasses, India’s ethanol output now draws on a wider mix: surplus grain, maize, damaged food stocks. This diversification has broadened the ethanol economy, distributing procurement across states and reducing pressure on sugar-producing regions. But as production scales and the reliance on food crops increases, so do concerns about long-term land use, water consumption, and food price volatility.

To be clear, few policies offer such a tight braid of climate benefit, economic stimulus, and geopolitical hedge, especially as India’s position on the global energy stage grows more fraught. Since 2022, the country has sharply increased its intake of discounted Russian crude, rising to account for 35 to 40 percent of its total oil imports. By some estimates, this shift has saved India over $26 billion (Rs 2.21 lakh crore) over three years, primarily by avoiding pricier Gulf oil benchmarks. But these gains have not gone unnoticed in Washington. The US has accused India of indirectly aiding Russia’s war effort, citing refined product exports and circumvention of G7 price caps. Donald Trump has gone further, saying: “India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA.” Trump had already imposed a 25 percent tariff on Indian imports beginning August 2025 and hinted that penalties could rise to 100 percent for countries continuing to purchase Russian energy.

In this context, India’s ethanol policy is not just a gesture toward decarbonisation or rural income, it is a hedge. An effort to reclaim a measure of energy sovereignty, to diversify risk in a world where pipelines and sanctions increasingly overlap.

decarbonisationE20 material-compliantenergy sovereigntyethanol policyrural income