The Hindu: Published on 18th August 2025.
Why in News?
India has achieved 20% ethanol blending (E20) in petrol five years ahead of schedule under the National Policy on Biofuels.
While the government hails this as a success in reducing oil imports and increasing farmer income, concerns remain about vehicle performance, environmental costs, and long-term sustainability.
Simultaneously, the slower adoption of EVs compared to other major economies raises questions about India’s energy transition strategy.
Impact of Ethanol Blending
Positive Outcomes:
India saved ₹1.40 lakh crore in foreign exchange since 2014–15.
Farmers earned over ₹1.20 lakh crore from ethanol-related sugarcane sales.
The government claims 700 lakh tonnes of CO₂ emissions reduction.
Concerns:
- Mileage drop and engine maintenance issues for consumers.
- Groundwater depletion due to water-intensive sugarcane cultivation (60–70 tonnes water per tonne of cane).
- Risk of land degradation and worsening desertification.
- Reaction of Petrol Vehicle Owners to E20 Mandate.
Public sentiment:
Survey (36,000 respondents, 315 districts): 2 in 3 petrol vehicle owners oppose E20, only 12% support it.
Main concerns: lower mileage, higher maintenance costs.
Government stance:
Acknowledges “marginal drop” in efficiency but calls backlash a “vilification campaign”.
NITI Aayog has suggested tax incentives to compensate consumers for efficiency loss.
Automakers:
New vehicles (post-2023) are E20-compatible.
Older vehicles may need material upgrades (rubber, elastomers, plastics).
Environmental Sustainability of Sugarcane-Based Ethanol
Sugarcane accounts for the bulk of ethanol production.
Water stress problem:
Requires 1500–3000 mm rainfall annually, but many regions rely on groundwater extraction.
Maharashtra districts show unsustainable groundwater use.
Land degradation:
Nearly 30% of India’s land already degraded (as per Desertification Atlas 2021).
Diversification efforts:
Ethanol now also from rice (3.6% of output) and corn (34% diverted in 2024–25).
However, led to surge in corn imports (6x increase).
Future trend: By 2034, 22% of sugarcane expected to go into ethanol production.
U.S. Reaction to India’s Ethanol Policy:
The U.S. has flagged India’s ethanol import restrictions as a “trade barrier” in its 2025 National Trade Estimate report.
The Trump administration is pressing India to allow ethanol imports.
Indian Sugar Mills Association wants restrictions maintained to protect local producers.
Policy liberalisation could undermine domestic ethanol investments.
Why is EV Adoption Slower in India?
Current status: Only 7.6% of vehicle sales in 2024 were EVs.
To meet the 2030 target (30% EVs), sales must grow by 22% in the next five years.
Challenges:
High costs and limited charging infrastructure.
Dependence on Rare Earth Elements (REEs) like magnets for EVs, largely sourced from China.
Supply disruptions:
Maruti Suzuki cut production targets for its e-Vitara due to rare earth shortages.
Global REE supply is vulnerable to Chinese export restrictions.
Comparisons:
Countries like China, EU, and U.S. have far higher EV adoption rates, helped by policy push and infrastructure.
Key Issues Going Forward
Consumer Concerns: Will govt. provide tax incentives or subsidies to offset mileage/maintenance costs?
Environmental Risks: Can India sustain sugarcane-driven ethanol without worsening water stress and land degradation?
Trade Pressures: Will India resist U.S. demand for ethanol imports to protect domestic industry?
Energy Transition Strategy: Will ethanol blending delay or complement EV adoption?
EV Supply Chains: Can India reduce dependence on China’s rare earths through domestic mining or global partnerships?
Policy Direction: Uncertainty persists on whether India will push ethanol blending beyond 20%.
Conclusion:
India’s ethanol blending achievement is significant, but it faces consumer resistance, environmental challenges, and international trade pressure. While ethanol provides short-term gains, the long-term solution lies in faster EV adoption powered by renewable energy, coupled with diversification of ethanol sources beyond sugarcane to make the transition sustainable.
