Currently, 10% ethanol is blended into gasoline (10% ethanol, 90% gasoline), and the government plans to double this amount by 2025. At the India Energy Week (IEW) 2023, Prime Minister Narendra Modi launched the higher 20% ethanol-blended petrol two months ahead of the planned April rollout.
"We increased ethanol blending in gasoline from 1.5 percent (in 2014) to 10% and are now working towards 20% blending," PM Modi said. The first phase will cover 15 cities, and it will be expanded throughout the country over the next two years. In addition to benefiting farmers, 10% blending saved India up to 53,894 crore in foreign exchange.
E-20 (petrol containing 20% ethanol) will be available at 84 petrol pumps operated by three state-owned fuel retailers across 11 states/UTs. Oil Minister Hardeep Singh Puri stated that India achieved 10% ethanol blend in gasoline 5 months ahead of schedule in June 2022.
"As a fast-growing economy, India is expected to have the largest increase in energy demand of any country over the next two decades, accounting for close to 28% of incremental global growth in energy demand," he said. The use of ethanol, which is extracted from sugarcane, broken rice, and other agricultural products, will assist the world's third largest oil consumer and importer in reducing its reliance on overseas shipments. India is currently 85 percent reliant on imports to meet its oil needs. It also reduces carbon emissions.
When compared to E0, the use of E20 reduces carbon monoxide emissions by approximately 50% in two-wheelers and approximately 30% in four-wheelers (neat petrol). Both two-wheelers and passenger cars are expected to have 20% lower hydrocarbon emissions. In the fiscal year 2021-22, India spent USD 120.7 billion on crude oil imports (April 2021 to March 2022). In the current fiscal year, oil imports cost USD 125 billion in the first nine months (April 2022 to December 2022).
During the supply year ending November 30, 2022, up to 440 crore litres of ethanol were blended into gasoline. A procurement of 540 crore litres is planned for the coming year in order to begin larger volumes of blending. The target of achieving average 10% blending was met in June 2022, well ahead of the November 2022 deadline. Encouraged by the success, the government shifted the target of 20% ethanol blending in gasoline from 2030 to 2025.
The programme provides an additional source of income for sugarcane farmers. Over the last eight years, ethanol suppliers have earned 81,796 crore, while farmers have received 49,078 crore. Foreign exchange outgo was reduced by Rs 53,894 crore. It also resulted in a reduction of 318 lakh tonnes of CO2 emissions. Along with the launch of E20, the Green Mobility Rally was part of the IEW-23 to raise public awareness for the country's green fuels such as E20, flex fuels, hydrogen, and CNG, among others.
The Rally route featured creative displays demonstrating the benefits accrued in terms of foreign exchange, income to farmers, and GHG emission reductions. The Green Mobility Rally featured a variety of two-, three-, and four-wheeler vehicles, including E20, E85, CNG, and Hydrogen vehicles. Automobile engines can run on E-20 (petrol doped with 20% ethanol) with minor engine modifications for corrosion, etc.
Since 2014, the government has announced the administered price of ethanol. The government announced the differential price of ethanol based on feed stock used for ethanol production for the first time in 2018. As a result of these decisions, ethanol procurement by public sector oil marketing companies (OMCs) has increased from 38 crore litre in Ethanol Supply Year 2013-14 (ESY defined as ethanol supply period from December 1 of a year to November 30 of the following year) to contracts worth more than 452 crore litre in the ongoing ESY 2021-22.
According to the NITI Aayog Roadmap, which is based on projected petrol sales, the estimated ethanol requirement for blending with petrol is 542 crore litres for ESY 2022-23, 698 crore litres for ESY 2023-24, 988 crore litres for ESY 2024-25, and 1016 crore litres for ESY 2025-26. Up to January 30, 2023, oil companies purchased 80.09 crore litres of ethanol for blending in petrol during the ESY 2022-23 and 6 crore litres of bio-diesel for blending with diesel during the fiscal year 2022-23.
