Nationwide E20 Fuel Mandate Starts April 1
In a major policy shift, E20 ethanol-blended petrol will become mandatory across India from April 1. The move is expected to impact vehicle mileage and could increase transportation costs for consumers, potentially affecting household budgets and spending habits, including travel to local markets.
This mandate is part of India's National Policy on Biofuels, which originally set a 20% blending target for 2030. However, after achieving a 10% blend in June 2022, five months ahead of schedule, the government advanced the 20% target to 2025-26. The policy aims to reduce the country's reliance on costly oil imports and curb carbon emissions. The government estimates that ethanol blending has already saved over ₹1.40 lakh crore in foreign exchange since 2014-15. Achieving the 20% blending target is projected to save approximately ₹30,000 crore (around $4 billion) annually on the oil import bill. This move is also intended to boost the agricultural sector by creating steady demand for crops like sugarcane and maize, which are the primary feedstocks for ethanol. To ensure engine safety and performance, the mandated E20 fuel will have a minimum Research Octane Number (RON) of 95. Ethanol is a natural octane booster, and its higher rating of around 108 helps prevent engine knocking. While most vehicles manufactured after 2023 are designed to be E20 compatible, older models may experience a 3-7% decrease in fuel efficiency. To meet the increased demand, India will require an estimated 10.16 billion liters of ethanol annually by 2025 for blending purposes alone. In response, the government has removed production limits on ethanol from sugarcane juice and molasses for the 2025-26 supply year. This is expected to provide a significant boost to sugar mills and distilleries, which have been expanding their production capacities.
