India plans to introduce 20% ethanol-mixed gasoline by the end of the year

*Paromita Das

According to a new report by the Institute for Energy Economics and Financial Analysis, India will need to bring in more land under cultivation of feedstock—agricultural products that can be converted into ethanol—land that can be better used for the generation of renewable energy and for furthering India’s electric vehicle adoption program—to meet its target of 20% ethanol blended in petrol by 2025 (commonly known as the E20 target) (IEEFA).

Furthermore, experts say that the ethanol target will not significantly reduce global warming emissions, will be detrimental to India’s food security, and will only help us inch closer to energy security.

Recently, Hardeep Singh Puri, the Union minister for petroleum and natural gas, recently stated that 20 percent ethanol-blended gasoline may be available at select petrol pumps across the country before the April 2023 deadline.
The announcement comes just one day after Prime Minister NarendraModi announced that India had reached a 10% ethanol blend-in gasoline goal, five months ahead of schedule for a November 2022 deadline.

“We were able to achieve 10% biofuel blending five to six months ahead of schedule, and I believe that’s the spirit with which we’re approaching sustainability on all fronts,” Puri, who also oversees housing and urban affairs, said.
The minister said that in both the housing and petroleum ministries’ initiatives, there was “full emphasis on green sustainability… whether it is 10% ethanol blending already achieved or the target of 20% ethanol blending which was set for 2030, which we are going to do by 2025 or the fact that E20 is already in use.”

He claimed that the government has taken numerous concrete steps to advance the sustainability agenda over the last eight years.

“At COP26 in Glasgow, Prime Minister NarendraModi announced India’s aggressive climate change agenda through the PanchAmrit action plan, which aims to make India a net-zero emission country by 2070. The LCCM programme, which began today, aims to not only identify hundreds of climate leaders, but also to focus on how these leaders can be oriented in terms of training and future plans. The mere fact that we are considering it is a significant step forward.”
The prime minister pledged to achieve net zero carbon neutrality by 2070 when he announced the ‘PanchAmrit’ action plan at COP26 in November last year.

Basics of Ethanol Fuel

Ethanol is a renewable fuel made from a variety of plant materials called “biomass.” To oxygenate the fuel and reduce pollution, more than 98% of gasoline in the United States contains ethanol, typically E10 (10% ethanol; 90% gasoline).

Ethanol can also be found in the form of E85, which can be used in vehicles that can run on any blend of gasoline and ethanol up to 83%. Another blend, E15, is approved for use in light-duty vehicles manufactured after 2001.

What are the advantages and disadvantages?

Ethanol can be blended into gasoline to reduce the amount of gasoline needed to power a vehicle, reducing reliance on imported, expensive, and polluting petroleum. India currently imports 85% of its oil needs.

According to a roadmap for ethanol blending released by NITI Aayog, the Center’s policy think-tank, India’s net petroleum imports in 2020-21 were 185 million tons at a cost of $551 billion. Because transportation uses the majority of petroleum products, the E20 programme could save the country $4 billion (Rs 30,000 crore) per year.

Why ethanol is recommended

Furthermore, ethanol is a less polluting fuel that provides comparable efficiency at a lower cost than gasoline. Some of the supporting arguments used in the roadmap for E20 include the availability of large arable land, rising production of food grains and sugarcane leading to surpluses, availability of technology to produce ethanol from plant-based sources, and the feasibility of making vehicles compliant with ethanol blended petrol (EBP).

What consumers stand to gain and what they stand to lose

Ethanol is one of the most common biofuels, produced either naturally or through petrochemical processes from sugar fermentation by yeasts. Sugarcane-based raw materials or certain types of heavy molasses, sugarcane juice/sugar/sugar syrup, surplus rice available from the Food Corporation of India and maize are used to make it in India. First-generation biofuels are what they’re called.

Up until 2013-14, average blending ranged from 0.1% to 1.5% since the start of the EBP program in 2003. Following that period, the government made a number of interventions, including easing tender conditions, establishing an interest subvention scheme—a financial support scheme for distilleries—to increase production capacity, and more, as a result of which average ethanol blending in the country reached 5% in Ethanol Supply Year (ESY) 2019-20. An ESY is a period of time that runs from December of one year to November of the following year.

As of March 13, 2022, India had achieved 9.45% ethanol blending in ESY 2021-22. The Ministry of Petroleum and Natural Gas (MoPNG) aims to increase this to 10% in ESY 2021-22, and the government advanced its target of 20% blending from 2030 to 2025 in December 2020. However, this goal is fraught with difficulties.

What will be the effect of the new fuel on our vehicles?

Ethanol can be used in vehicles calibrated to a specific degree of ethanol blending (for example, E20) or in flex fuel vehicles that can run on either pure fossil fuel or fossil fuels blended with any degree of biofuel.
Vehicles that are E20 compatible have a long way to go. Vehicles manufactured in India since 2008 are E10 material-compatible (rubber and plastic components) and E5 fuel-efficient, but their engines are not tuned to E10 for optimum performance. When E10 gasoline becomes available across the country, new vehicles will require engine modifications.

Furthermore, when using E20, four-wheelers originally designed for regular gasoline and calibrated for E10 lose 6-7% of their fuel efficiency; two-wheelers designed for regular, unblended gasoline and calibrated for E10 lose 3-4% of their fuel efficiency; and four-wheelers designed for E10 and calibrated for E20 lose 1-2% of their fuel efficiency.

In addition, flex fuel vehicles (four-wheelers) would cost Rs 17,000 to Rs 25,000 more, and two-wheeled flex fuel vehicles would cost Rs 5,000 to Rs 12,000 more, compared to ordinary vehicles designed to run on 100% gasoline. E20-compliant vehicles are expected to cost Rs 3,000 to Rs 5,000 more for four-wheelers and Rs 1,000 to Rs 2,000 more for two-wheelers. This level of vehicle modification and calibration will necessitate significant investment in infrastructure.

“We estimate that 162 million motorised two-wheelers and 4.2 million three-wheelers on the road use gasoline,” said Himani Jain, senior program lead at the Council on Energy, Environment, and Water in New Delhi (CEEW). “Retrofitting the engines of such a large existing vehicle stock across India will necessitate a large number of competent skilled technicians, strategic and early infrastructure planning, and robust monitoring systems.”

Maize and sugarcane can both be used to make ethanol

In a hungry country, however, increasing food-based feedstock production for ethanol production may not be the best use of land, according to IEEFA. On the World Hunger Index 2021, India came in at number 101 out of 116 countries.
Independent experts also believe that current ethanol production based on surpluses or damaged food grains can be maintained at current levels or at E10 (10% ethanol-blended gasoline). But that the E20 target is a misplaced priority for India.

“We are wasting land that could be used for food crops if we increase the area under sugarcane cultivation. Increasing land under food grains like maize for ethanol makes no sense from the standpoint of food security, and maize produces less ethanol than sugarcane “RamyaNatarajan, a research scientist at the Center for Study of Science, Technology, and Policy in Bengaluru, agreed (CSTEP). “What’s more, while there may be a surplus (of grains or sugarcane) right now, there are so many factors that influence yield, such as climate change.”

If the goal is E10 rather than E20, Natarajan believes it can be met with current molasses and sugarcane juice supplies, with no additional land or water required.

Even the NITI Aayog roadmap recommends that ethanol production shift away from water-intensive first-generation biofuels such as sugarcane and toward advanced biofuels.

According to the roadmap, “the task force on sugarcane and sugar industry estimated that sugarcane and paddy use 70% of the country’s irrigation water, depleting water availability for other crops.” “As a result, crop patterns must change to reduce reliance on a single crop and to shift to more environmentally sustainable crops for ethanol production.”

It will be a cost-effective venture

However, because the cost of raw materials—sugarcane and food grains—is set by the government to support farmers, the price of ethanol produced in India is higher than in other countries. However, the excise duty on the landed cost of gasoline at oil depots is currently higher than the Goods and Services Tax (GST) on the landed cost of ethanol, and the benefit is being passed on to retail customers.

On May 1, petrol cost Rs 105 in Delhi, and high petrol prices benefit EBP users. Consumers may have to pay more for ethanol-blended fuel if the price of ethanol rises above the price of gasoline. According to the NITI Aayog roadmap, tax (GST) breaks on ethanol may be required in such a scenario.

CEEW’s Jain emphasizes that the benefits of ethanol-blended gasoline are insignificant in comparison to the effort. “Consumers benefit from blending ethanol only if there is a significant increase in fuel prices; otherwise, the gains are not that significant,” she said.

“When we last checked in November, the savings were as low as 5% to 6%. Investing in the internal combustion engine value chain makes no sense for OEMs (Original Equipment Manufacturers or automobile manufacturers) because it will be phased out eventually (as EVs are introduced). Apart from Brazil, ethanol is not being considered as an energy security solution anywhere else in the world “Jain stated.”When oil prices were lower, the scheme (EBP) was more expensive for a consumer purchasing EBP,” Gandhi explained. “Right now, oil prices are high, so consumers get a great deal in terms of the amount that is passed on to them.” The EV ecosystem will take time to mature. You spread CNG until then, and demand shifts to blended gasoline.”

How will it aid in the reduction of global warming emissions?

When compared to unblended gasoline, E20 fuel is expected to reduce carbon monoxide emissions by 50% in two-wheelers and 30% in four-wheelers, according to the roadmap. When ethanol blends are used instead of regular gasoline, hydrocarbon emissions are reduced by 20%. But, in terms of absolute reductions in greenhouse gas emissions, how does that stack up?

According to our calculations, E20 will reduce GHG emissions by 5% in the transportation sector by 2025 (not including life cycle emissions),” Natarajan says. “Is it worth it to put in so many resources to achieve 5%?”