E20 rollout row: Govt has no plan to go back to E0

In 2014-15, the Union Ministry of Heavy Industries funded a project to study the suitability of a 20% ethanol-gasoline blend (E20) and its impact on vehicles. The study, conducted jointly by Automotive Research Association of India (ARAI), Indian Institute of Petroleum (IIP) and Indian Oil Corporation, revealed up to 6% decline in fuel economy, depending on the vehicle type. The test vehicles passed startability and drivability tests at hot and cold conditions with E0 (ethanol-free petrol) and E20 test fuels.

Subsequently, the government came out with the National Policy on Biofuels (NPB), 2018, under which a target was set to achieve 20% ethanol blending in petrol by 2030. By May 2022, India achieved 10% ethanol blending, five months ahead of schedule. Buoyed by the progress, the Union Cabinet in May 2022 amended the NPB, advancing the 20% blending target by five years from 2030 to 2025.

Union Minister of Petroleum and Natural Gas Hardeep Singh Puri recently announced that the 20% ethanol blending target had been achieved, more than five years ahead of the original target of 2030. “India hits 20% ethanol blending in petrol five years ahead of target. From just 1.5% in 2014 to 20% in 2025, this clean energy leap has: saved Rs 1.36 lakh crore in forex, paid Rs 1.18 lakh crore to farmers, cut 698 lakh tonnes of CO₂ emissions,” Puri wrote on X in July. 

Ethanol blending in petrol started in India on a pilot basis in 2001. The Ethanol Blended Petrol (EBP) programme was launched in 2003, and, in 2006, the Ministry of Petroleum and Natural Gas directed the public sector oil marketing companies (OMCs) to sell 5% ethanol-blended petrol in 20 states and four union territories. However, the progress remained slow, with ethanol blending in petrol at 1.53% in 2014.

After the launch of the National Policy on Biofuels, 2018, ethanol production surged from 38 crore litres in 2014 to 661.1 crore litres by June 2025.

During the last 11 years from Ethanol Supply Year (ESY) 2014-15 to ESY 2024-25 up to July 2025, ethanol blending in petrol by public sector OMCs has resulted in savings of more than Rs 1,44,087 crore of foreign exchange, crude oil substitution of about 245 lakh metric tonnes providing crucial energy security and CO2 emission reduction of approximately 736 lakh metric tonnes, the equivalent of planting 30 crore trees, as per data shared by the petroleum ministry last month.

At 20% blending, it is expected that payment to the farmers in this year alone will be to the tune of Rs 40,000 crore and forex savings will be around Rs 43,000 crore.

The opposition parties, like the Congress and the Trinamool Congress, levelled allegations of conflict of interest against Union Minister of Road Transport and Highways Nitin Gadkari, claiming that he had been “aggressively lobbying” for ethanol production while his two sons were involved in firms that produced ethanol and “benefited” from government policy. The ruling BJP, however, dismissed the allegation.

Gadkari, himself, earlier slammed “some people in the petroleum lobby” for running the “completely false” campaign about E20 lowering the fuel efficiency of vehicles.  

“Going back to E0 petrol (without ethanol) would involve losing the hard-fought gains on pollution,” the petroleum ministry said, signalling intent to go ahead with the implementation of the national Ethanol Blending Programme.