The Union Cabinet on Wednesday approved amendments to the National Policy on Biofuels, 2018, to advance the date by which fuel companies have to increase the percentage of ethanol in petrol to 20%, from 2030 to 2025. The policy of introducing 20% ethanol will take effect from April 1, 2023.
A press statement from the government said the new policy would allow more feed stock for producing biofuel and foster the development of indigenous technologies.
Also read | What is Ethanol-blended petrol? Should we be concerned?
A 2021 report by the NITI Aayog said that “immense benefits” could accrue to the country by 20% ethanol blending by 2025, such as saving ₹30,000 crore of foreign exchange per year, increased energy security, lowered carbon emissions, better air quality, self-reliance, better use of damaged foodgrains, increased farmers’ incomes and greater investment opportunities.
India achieved 9.45% ethanol blending as on March 13, 2022, according to the Ministry of Petroleum and Natural Gas (MoPNG). The Centre projects that this will reach 10% by the end of financial year 2022. The government first announced its plans of advancing the 20% blending target in December 2020.
Impact on engines
A 10% blending of petrol does not require major changes to engines but a 20% blend could require some changes and may even drive up the prices of vehicles. A greater percentage of blending could also mean more land being diverted for water-intensive crops such as sugar cane, which the government currently subsidises.
The NITI Aayog projects an ethanol demand of 10.16 billion litres by 2025, based on the adoption of vehicles. The current ethanol production capacity in India of 4.26 billion litres derives from molasses-based distilleries, and 2.58 billion litres from grain-based distilleries. This is expected to expand to 7.6 billion litres and 7.4 billion litres respectively, and will require six million tonnes of sugar and 16.5 million tonnes of grains per annum by 2025.
The increased allocation of land also puts into question the actual reduction in emissions that blending ethanol with petrol brings about.
