Ethanol Blending Programme (EBP) in India

The Ethanol Blending Programme (EBP) is a key initiative of the Government of India aimed at reducing dependence on fossil fuels, promoting renewable energy, and enhancing income for farmers through the use of ethanol as a blending component in petrol. The programme seeks to achieve energy security, environmental sustainability, and economic efficiency by integrating biofuels into India’s transportation energy mix.
Ethanol, an alcohol-based renewable fuel, is produced mainly from sugarcane, maize, damaged food grains, and other agricultural residues. When blended with petrol, it reduces vehicular emissions, conserves foreign exchange, and provides a remunerative market for surplus agricultural produce.

Background and Evolution

India’s efforts to blend ethanol with petrol date back to the early 2000s. The policy was formally introduced in 2003, when the Government of India launched the Ethanol Blended Petrol Programme under the Ministry of Petroleum and Natural Gas (MoPNG). Initially, a 5% ethanol blending target was set in selected states and union territories.
Over time, the programme was expanded nationwide with enhanced targets to address rising energy demand and reduce the carbon footprint of the transport sector. In 2013, the National Policy on Biofuels gave new momentum to ethanol blending, setting a long-term framework for the production, procurement, and use of biofuels.
The most significant push came with the National Policy on Biofuels – 2018, which introduced flexible feedstock-based production, allowing ethanol to be produced not only from molasses but also from other agricultural sources.

Objectives of the EBP

The main objectives of the Ethanol Blending Programme are:

• To reduce India’s dependence on imported crude oil.
• To achieve energy security and diversification of fuel sources.
• To promote the use of renewable and sustainable energy.
• To provide an alternative remunerative outlet to farmers for surplus sugarcane and food grains.
• To reduce carbon emissions and environmental pollution.
• To strengthen rural economies by creating new employment opportunities in the biofuel sector.

Ethanol as a Biofuel

Ethanol (ethyl alcohol, C₂H₅OH) is a clean-burning oxygenate that can be blended with petrol to improve combustion efficiency. It is produced through two main processes:

• Fermentation of sugar-based feedstocks such as molasses, sugarcane juice, and sweet sorghum.
• Conversion of starch-based and cellulosic materials, including maize, broken rice, wheat, and agricultural residues.

Ethanol blending percentages are denoted as E5, E10, E20, etc., where the number represents the ethanol percentage in the petrol blend. For instance, E20 indicates a 20% ethanol–80% petrol mixture.

Policy Framework and Implementation

The EBP operates under the Department of Food and Public Distribution (DFPD), Ministry of Petroleum and Natural Gas (MoPNG), and Oil Marketing Companies (OMCs) such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum.
Key policy initiatives include:

1. National Policy on Biofuels, 2018

• Allows ethanol production from multiple feedstocks (B-molasses, sugarcane juice, grains, damaged food grains).
• Provides incentives for establishing distilleries and ethanol plants.
• Encourages second-generation (2G) biofuels made from lignocellulosic biomass.

2. Pradhan Mantri JI-VAN Yojana (2019)

Aims to promote 2G ethanol projects using agricultural and forestry residues, thereby reducing waste and environmental pollution.

3. Roadmap for Ethanol Blending 2020–2025

Launched by the Prime Minister in June 2021, the roadmap advances the E20 blending target from 2030 to 2025. It outlines a comprehensive strategy for feedstock supply, infrastructure expansion, and technology adoption.

4. Price Rationalisation

The government announces differential pricing for ethanol based on feedstock types to encourage diverse production sources. For example, ethanol produced from B-heavy molasses or sugarcane juice commands a higher price than that from C-molasses.

Progress and Achievements

India has made remarkable progress in ethanol blending over the past decade:

• 2003: EBP launched with a 5% target in select states.
• 2014: National average ethanol blending stood at around 1.5%.
• 2018–19: Blending rate reached 5%.
• 2020–21: Achieved a national average of 8.1% blending.
• 2021–22: Crossed 10% blending, nine months ahead of schedule.
• Target: Achieve 20% blending (E20) by 2025–26.

India’s ethanol production capacity has increased substantially, with over 500 operational distilleries and new facilities under construction to meet the E20 target.

Feedstock Diversification

The EBP promotes diversification of feedstocks to ensure sustainable ethanol supply. The major sources include:

• Sugar-based feedstocks: Sugarcane juice, B-heavy molasses, and C-heavy molasses.
• Starch-based feedstocks: Maize, broken rice, and surplus grains.
• Second-generation biofuels: Agricultural residues, bamboo, and forestry waste.

The use of multiple feedstocks helps maintain supply even during low sugar production years and supports farmers across different crop sectors.

Benefits of Ethanol Blending

The Ethanol Blending Programme yields multiple economic, environmental, and social benefits:

1. Economic Benefits

• Reduces the import bill on crude oil, saving valuable foreign exchange.
• Generates rural employment through ethanol production units.
• Provides an assured market for sugarcane and grain farmers.

2. Environmental Benefits

• Reduces greenhouse gas emissions by approximately 20% compared to petrol.
• Decreases vehicular pollution and improves air quality.
• Promotes sustainable utilisation of agricultural residues.

3. Social Benefits

• Strengthens the rural economy by creating demand for agricultural produce.
• Enhances farmer income and supports agricultural diversification.
• Contributes to India’s commitments under the Paris Climate Agreement.

Challenges and Constraints

Despite its success, the EBP faces several challenges:

• Feedstock availability: Dependence on sugarcane may affect water use and crop diversification.
• Infrastructure limitations: Inadequate storage, transportation, and blending facilities in some regions.
• Price fluctuations: Variability in ethanol and crude oil prices can affect profitability.
• Technological challenges: Need for advanced distilleries and 2G ethanol production technologies.
• Environmental concerns: Over-reliance on water-intensive crops like sugarcane in drought-prone areas.

Government Measures to Overcome Challenges

To address these challenges, the government has undertaken several strategic steps:

• Promoting grain-based ethanol production to supplement sugar-based sources.
• Providing financial assistance and soft loans for new distillery projects.
• Simplifying licensing norms and environmental clearances for ethanol plants.
• Encouraging research and development in second-generation ethanol technologies.
• Expanding the E20-compatible vehicle network and fuel distribution infrastructure.

Future Outlook

The Ethanol Blending Programme is integral to India’s long-term energy and climate goals. By 2025–26, India aims to:

• Achieve 20% ethanol blending in petrol.
• Produce over 1,000 crore litres of ethanol annually.
• Establish a robust network of bio-refineries across states.
• Reduce carbon dioxide emissions by an estimated 10 million tonnes per year.
• Save over ₹30,000 crore annually in foreign exchange.