Oil price rises bolster India's ethanol push despite drawbacks

In India, ethanol blends are a response to energy shocks

Biofuels blend is also a result of surplus stocks

* Experts warn about impact on fuel efficiency and water

Bhasker Tripathi

India's plan to reduce emissions and cut costs from transport is based on ethanol, which can be made from sugarcane, maize and rice. State-run oil companies are required to mix 20% ethanol into each litre before it is sold at the pump.

India achieved its 20% ethanol target, also known as E20 last year five years before schedule. This was despite complaints from drivers about reduced fuel efficiency and increased wear on engines.

In March, Prime Minister Narendra Modi stated that the blending of ethanol with crude oil during the U.S.-Israeli war against Iran had reduced dependence on imported crude.

Nitin Gadkari, the Transport Minister, has called for higher blends of ethanol (such as 85%) and that vehicles run on ethanol exclusively.

India is the third-largest crude importer in the world, with 85% of its oil requirements being met by imports. The government wants to reduce its crude import bill, and increase energy security. India has an excess ethanol production capability.

Experts warn that there is a lack of a long-term, clear strategy to decarbonise transport, which could lead to trade-offs in terms of efficiency, water usage and climate.

ETHANOL RISKS

The government set up an interministerial panel after rolling out E20 across the country to look at ways to utilize excess ethanol production capacity. This includes increasing blending levels.

Ethanol manufacturers are pushing for higher goals and wider adoption of vehicles that can run on high levels ethanol.

The benefits of blending are lessened as the levels increase.

Shyamasis das, a fellow with the Centre for Economic and Social Progress, a think tank that focuses on public policy, said: "Higher blends can reduce oil imports but not by as much as is often claimed."

According to the US Energy Information Administration, ethanol has a third less power per litre than gasoline. This means that vehicles have to burn more fuel in order to produce the same amount of power. Das stated that this limits the amount of oil demand that can be reduced by blended fuels.

Anumita R. Roychowdhury is the executive director of the Centre for Science and Environment in Delhi, which is a think tank.

Roychowdhury said that biofuels reduce greenhouse gas emissions but also emit other pollutants.

Roychowdhury stated that while some pollutants like nitrogen oxides may decrease, others, such as carbonyl compound emissions, can increase.

She said India will need to introduce regulations like Brazil which uses high levels ethanol in vehicles but regulates toxic compounds such acetaldehyde, and formaldehyde.

FAST-RISING GAS

India's ethanol percentage in gasoline has increased more than 13-fold in just 11 years. It went from 1.5% in 2014 to 20.0% in 2025. This is a much faster increase than other countries that produce ethanol.

The government claims that the switch to biofuel has saved 12 billion dollars in crude oil imports, and prevented 54.4 million tonnes in carbon emissions over a ten-year period. This is equivalent to emissions produced by 12 million petrol vehicles each year. The government also describes the fuel efficiency reduction as marginal.

Requests for comments from the Transport and Petroleum Ministries were not answered.

Das stated that the climate impact of ethanol depends not only on its use, but also how it is produced.

In India, the majority of ethanol used in blending comes from food crops rather than agricultural waste. This raises concerns over both emissions and resource usage.

Das warned that the use of crops such as sugarcane or maize to produce ethanol would put additional pressure on land and water. This could lead to social tensions in already water-scarce areas.

Farmers in several states have protested new ethanol distilleries. They cite water pollution and stress on the environment. The diversion of crops like maize for fuel production has also made it more costly to feed poultry and livestock.

In India, the push for ethanol is causing farmers to abandon oilseed crops, undermining India’s efforts to reduce cooking oil imports. Instead, they are raising crops to feed the ethanol industry.

According to data from the industry, during the current supply year, oil companies requested about 10.5 billions litres of Ethanol, but received offers for approximately 17.8 billions litres.

Das stated that India pursued a variety of fuel options, from hybrids and electric vehicles to biofuels. "This risks spreading resources thinly and confusing the industry."

Roychowdhury stated that ethanol could be more suitable for the industry where systems can easily be adapted to better handle fuels with lower energy content. This would be preferable to pushing it to transport, which risks slowing down the transition to cleaner technology.

(source: Reuters)