Is Ethanol Blending India’s Next Fuel Revolution?

Ethanol Blending

Discover how ethanol blending is shaking up the fuel game, promising cleaner fuel, a greener future, and economic growth.

Have you heard about ethanol blending? It is a hot topic right now, not just for the government but for everyone. 

But what’s all the fuss about? 

Well, here is the thing: Ethanol could save India billions of dollars in oil imports!

You see, India is a growing economy, but this growth is coming at the cost of harming our environment. In 2022, India was at the very bottom of the list in the Environmental Performance Index, according to The Hindu. 

Over the past ten years, India has been slipping in many areas, especially when it comes to things connected to the climate. While other countries are cutting down on coal, India is using even more of it. This leads to more carbon dioxide in the air, which is not great for our sustainability goals. This is just one such example. But, to tackle this, policies are made. 

And one such policy is supporting companies that blend ethanol, a special type of fuel. Ethanol could be the secret sauce to help India grow without hurting the environment.

So, what is ethanol? And why is it such a big deal for fuel? Let’s dive in and discover the answers!

What’s Happening?

Let’s take a journey through time! In 2014, only 1.5% of ethanol was mixed with petrol in India. But, the blend grew to a solid 10% over these years. 

This year, India aims even higher for an impressive 20% blend of ethanol with petrol. The plan is to start with 15 cities in the first phase, where this super blend will be used and then in the next two years, it will spread across the entire country.

As we read earlier, ethanol blending is the superhero move to save the environment and shrink those big import bills. The result can also be seen. By using a 10% blend, India has already saved a jaw-dropping Rs 53,894 crore in foreign exchange, according to The Hindu. 

Moreover, the government has also asked car manufacturers to start producing Flex Fuel Vehicles (FFV), which can run on 100% ethanol fuel, and according to News18, Toyota launched the world’s first Electric Flex Fuel Vehicle on 29th August 2023. 

What is Ethanol, and How is it the Super Fuel For the Environment?

Ethanol is a special fuel made from plants like sugarcane and corn, which contain a lot of sugar. This is where sugar companies come in. They used to take out only sugar from sugarcane, but now they also use the rest of the plant to make ethanol.

This is important for countries like India, the third largest sugar importer in the world, and its crude demand is increasing daily. 

Ethanol has a special ability – it can be mixed with regular fuel, making it cleaner and more environmentally friendly. This is like a superhero fuel because it helps the country save money and become less dependent on imported oil. 

Challenges Faced By Ethanol Blending Companies

The most significant hurdle that ethanol blending companies face is the insufficient supply of feedstock, such as sugarcane or corn, to meet the growing demand for ethanol production. For example, in the current scenario where sugarcane production has taken a hit, it is evident that ethanol production will also fall. This is a significant challenge for sugar and ethanol blending companies. 

For example, a recent report from The Hindu mentions that the amount of sugar expected to be made in the upcoming 2023-24 sugar season might be less, around 317 lakh tonnes, compared to 328 lakh tonnes in the ongoing season. This drop is because the supplies are being used to make ethanol instead of sugar.

What’s Next?

There’s an upward trend in food prices, and certain types of rice and sugar are no longer allowed to be exported. In addition, the government has temporarily halted the practice of sending subsidised rice to distilleries for ethanol production as part of the Ethanol Blending Programme (EBP).

However, it is important to view these challenges as short-term disruptions. In the long run, using agricultural resources like sugarcane and corn for fuel production could emerge as a transformative force in the fuel sector.

That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!

*The companies mentioned are for information purposes only. This is not an investment advice.


Teji Mandi Multiplier Portfolio of high quality companies that blends shorter term tactical bets with long term winners Subscription Fee
Min. Investment
Teji Mandi Multiplier Portfolio

Teji Mandi Multiplier

Concentrated portfolio of fundamentally strong small & midcap stocks that are likely to show potential growth.


Min. Investment

Subscription Fee

Teji Mandi Flagship A basket of 15-20 long-term and tactical stocks that we regularly rebalance to adjust to the market conditions. Subscription Fee
Min. Investment
Teji mandi Flagship portfolio

Teji Mandi Flagship

A Multi-Cap portfolio of 15-20 stocks that consists of tactical bets and long-term winners that generate index-beating returns.


Min. Investment

Subscription Fee

Recommended Articles

"Register Your Interest"

Already a member ? Log In