India has accelerated its adoption of ethanol-blended petrol, achieving a 20% mix (E20) five years ahead of schedule. The government credits the policy with reducing carbon emissions by nearly 70 million tonnes since 2014 and saving around $15.5 billion in foreign reserves. Officials see this as critical to curbing road transport emissions, which are projected to nearly double by 2050.

However, scepticism persists among motorists and manufacturers. Ethanol has lower energy density than petrol, leading to reduced fuel efficiency and possible damage to non-compliant vehicles. Although newer cars from brands like Honda and Maruti Suzuki use E20-compatible materials, most older vehicles do not. Some manufacturers are offering retrofitting kits, but many consumers remain unhappy about higher costs and limited fuel choices.

Food Security Risks and Agricultural Strain

Beyond transport, experts warn of wider consequences for agriculture and food security. Ethanol production relies heavily on sugarcane, a water-intensive crop, and increasingly on maize and rice. India has already begun importing maize to meet demand, straining the poultry sector, while the government diverted over 5 million tonnes of subsidised rice to ethanol in 2024. Critics argue that this undermines food security in a country where 250 million people still face hunger.

Think tanks estimate that by 2030 India may need an additional 8 million hectares of maize farmland to sustain the E20 target, raising fears of imbalances in crop production. Some researchers suggest maintaining a 10% ethanol blend would have been a more sustainable option.

Despite the environmental gains, motorists remain sceptical. Ethanol’s lower energy density and corrosive nature mean that many vehicles experience reduced mileage and greater wear and tear. Only newer models are E20-compliant, leaving millions of older vehicles vulnerable. Manufacturers like Maruti Suzuki and Bajaj have offered retrofit kits and additives, but consumers question why they must bear extra costs when alternative blends are unavailable at fuel stations.

Beyond engines, ethanol expansion has far-reaching implications for agriculture and food supply. Large amounts of sugarcane, maize, and rice are being diverted into fuel production. India imported maize in 2024 for the first time in decades, and public rice stocks—earmarked for subsidised food distribution—have been sold to ethanol plants at below-market prices. Experts warn that this diverts essential resources away from feeding people and livestock, fuelling price instability and rural discontent.

Scaling Up Amidst Uncertainty

Despite these challenges, the government remains committed to expanding ethanol use, with plans to gradually move towards E25, E27, and E30 blends. Officials argue that with engine upgrades and material replacements, mileage losses can be minimised. Yet food policy analysts caution that diverting staple crops to fuel cars could trigger long-term agricultural and social problems.

India has surpassed its target of blending 20% ethanol with petrol (E20) five years early, marking what officials describe as a turning point in reducing dependence on oil imports. Since 2014, ethanol blending has cut nearly 70 million tonnes of carbon dioxide emissions and saved $15.5 billion in foreign exchange. The government insists this shift is vital as road transport emissions are projected to nearly double by 2050.

Subsidies and Market Distortions

Critics also highlight how subsidies meant for food are effectively being channelled into fuel. In 2024–25, over 5 million tonnes of rice were allocated to ethanol production at heavily discounted rates, the gap absorbed through the food subsidy system. Ethanol by-products are displacing soybean meal in animal feed, lowering returns for farmers while edible oil imports continue to rise. Researchers caution that such distortions undermine both farmer incomes and India’s self-reliance goals.

Balancing Energy and Equity

India’s biofuel roadmap spans seven fuels, including ethanol, biodiesel, green hydrogen, and sustainable aviation fuel, with a target of 2.2 exajoules of output by 2030. Yet questions remain about whether this growth is sustainable. Producing green hydrogen, for example, consumes more power than the energy it generates. Analysts stress that only waste-based fuels can deliver truly fair and sustainable outcomes. As one expert put it, “fuel at the cost of food security isn’t sustainable.”

India’s biofuel strategy has the potential to reshape its energy landscape, cutting carbon emissions and reducing reliance on costly oil imports. Yet its heavy dependence on food crops and subsidies raises uncomfortable trade-offs that risk undermining food security, farmer incomes, and long-term sustainability. To succeed, the country must shift toward waste-based biofuels and adopt a balanced, equity-driven approach that ensures the green transition does not come at the expense of its most vulnerable citizens.

By Cole Jackson

Lead Associate at The BRICS+ Consulting Group 

Chinese & South American Specialist

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